Q3 2024 Waste Connections Inc Earnings Call

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Speaker Change: Now I'll turn the conference over to Ronald J Mill Stat, President and CEO. Please go ahead.

Speaker Change: Thank you operator and good morning.

I'd like to welcome everyone to this conference call to discuss our third quarter results and to provide an update to our full year 2024 outlook a detailed outlook for the fourth quarter as well as some early thoughts about 2025.

Speaker Change: I am joined this morning by Mary Anne Whitney, our CFO and other members of our leadership team.

Speaker Change: As noted in our earnings release, we are extremely pleased by the strength of our operating and financial results in the period positioning us for another increase to our full year 2024 outlook with momentum as we look ahead to 2025.

Good day and welcome to the waste connections in Q3, 'twenty 'twenty four earnings conference call.

Speaker Change: All participants will be on listen only mode should you need assistance. Please you know a conference specialist by pressing the star followed by zero.

Speaker Change: Solid waste growth led by six 8% core pricing was supplemented by incremental acquisition contributions and 90 basis points sequential improvement in solid waste volumes during the period to drive results above expectations.

After todays presentation, there will be an opportunity to ask questions to ask a question you May Press Star then one on your telephone keypad to try a question. Please press Star then two please.

Speaker Change: Please note this event is being recorded.

Speaker Change: Solid operational execution enabled us to deliver adjusted EBITDA margin of 33, 7% in the third quarter as we expected up to 120 basis points year over year overcoming margin dilution from acquisitions closed during the quarter and initial storm related impacts at quarter end.

Speaker Change: Oh, no I tried to call them separate Ronald Jamie I'll start President and CEO. Please go ahead.

Ronald Jamie: Thank you operator, and good morning I.

Ronald Jamie: I would like to welcome everyone to this conference call to discuss our third quarter results and to provide an update to our full year 'twenty 'twenty four outlook, a detailed outlook for the fourth quarter as well as some early thoughts about 2025 I'm joined this morning by Mary Anne Whitney, Our CFO and other members of our leadership team.

Speaker Change: Our results also reflect continued progress in employee retention with voluntary turnover improving for the eighth consecutive quarter, bringing multi year reductions to over 40% as we continued to invest in our most important asset our people.

Ronald Jamie: As noted in our earnings release, we are extremely pleased by the strength of our operating and financial results in the period positioning us for another increase to our full year 2024 outlook with momentum as we look ahead to 2025.

Speaker Change: Further we anticipate that our innovative approaches to drive continued improvement and employee engagement and retention should position us in 2025 for another year of above average underlying margin expansion in solid waste collection transfer and disposal.

Speaker Change: 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: Thank you Ron and good morning.

Mary Anne: Discussions 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 Africa.

Mary Anne: Canadian Securities laws actual results could differ materially from those made in such forward looking statements due to various risks and uncertainties.

Mary Anne: Factors that could cause actual results to differ are discussed both in the cautionary statement included in our October 2000, <unk> 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.

Mary Anne: Should not place undue reliance on forward looking statements as there may be additional risks of which we are not technical error, but we currently believe are immaterial, which could have an adverse impact on our business.

Mary Anne: 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.

Mary Anne: 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 measure management uses certain non-GAAP measures to evaluate and monitor.

Ronald Jamie: Due to various risks and uncertainties.

Mary Anne: The ongoing financial performance of our operations other companies may calculate these non-GAAP measures differently.

Ronald Jamie: Factors that could cause actual results to differ are discussed both in the cautionary statement included in our October 20, <unk> 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.

Speaker Change: I will now turn the call back over to Ron.

Ron: Okay. Thank you Marianne.

Ron: We are extremely pleased by our operational execution in Q3, driving financial results above expectations. As we continue to see the benefits of our focus on quality of revenue and human capital. While also delivering a record year of private company acquisition activity.

Ronald Jamie: 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 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.

Ron: Beginning with solid waste organic growth core pricing of six 8% was in line with our expectations reported volumes stepped up sequentially by 90 basis points as we began to anniversary a portion of the purposeful shedding we've referenced in previous periods and also as a result of more special waste activity, including some Q.

Ronald Jamie: 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.

Ron: For projects, which were pulled forward to Q3.

Ronald Jamie: Please refer to our earnings releases for a reconciliation of such non-GAAP measures to the most comparable GAAP measures.

Ron: Additionally, our results reflect incremental acquisition contributions with better than expected performance from acquisitions, we closed earlier in the year plus the impact of transactions closed during Q3.

Ronald Jamie: Vincent 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.

Ron: Most notably we acquired Royal waste services, one of the preeminent <unk> in New York City with best in Class collection transfer and recycling facilities not to be confused with oil Harding located further upstate.

Speaker Change: I will now turn the call back over to Ron Okay.

Ron Okay: Okay. Thank you Marianne.

Ron Okay: We're extremely pleased by our operational execution in Q3, driving financial results above expectations as we continue to see the benefits of our focus on quality of revenue and human capital.

Ron: Royal waste as prominently located in New York City, where they were awarded five of the commercial zones as part of the department of sanitation announced franchise system.

Ron Okay: We're also delivering a record year of private company acquisition activity.

Ron Okay: Beginning with solid waste organic growth core pricing of six 8% was in line with our expectations reported volumes stepped up sequentially by 90 basis points as we began to anniversary a portion of the purposeful shedding we've referenced in previous periods and also as a result of more special waste activity, including some Q.

Ron: As such our acquisition of Royall waste complements our already well established operations in New York City, where we were originally awarded 12 commercial zones.

Ron: We're now comfortably the largest and only fully integrated player in New York City.

Ron: On the subject of New York City, and its transition to a franchise model. We are pleased to report the initial phase is proceeding at or better than we expected based on our experience in September and the pilot zone, we believe that the opportunity for growth and operating efficiencies should exceed our initial expectations, particularly given our already well established.

Ron Okay: <unk> projects, which were pulled forward to Q3.

Ron Okay: Additionally, our results reflect incremental acquisition contributions with better than expected performance from acquisitions, we closed earlier in the year plus the impact of transactions closed during Q3.

Ron Okay: Most notably we acquired Royal waste services, one of the preeminent <unk> in New York City with best in Class collection transfer and recycling facilities not to be confused with Royal Harding located further upstate.

Ron: And now expanded footprint in the city.

Ron: What we've recognized from the onset of this franchise process was the critical importance of the location of assets within the city and the advantages. They provide additionally, we anticipated the benefit from the Optionality that would be afforded by our strategic acquisition 14 months ago of the Arrowhead landfill in Alabama, providing rail access from markets.

Ron Okay: Royal waste as prominently located in New York City, where they were awarded five of the commercial zones as part of the department of sanitation announced franchise system.

In the northeast.

Ron: With recent peak days running at over twice, our initial 3500 ton per day throughput activity at Arrowhead is also exceeding plan and benefiting several of our northeast markets, including New York City, as we work to optimize waste flows and disposal capacity utilization within our own network of facilities.

Moreover, we continue to evaluate incremental acquisition opportunities in the east as a result of this important element in our integration strategy. The franchise model being rolled out in New York City has transformed what was already a very good market for us into one with outstanding long term value creation potential.

Ron: Getting back to the broader topic of acquisitions.

As anticipated we are on track for a record amount of private company acquisitions in 2024, our biggest share since our founding in 1997.

Ron: To date, we have signed or closed over $700 million in annualized private company revenue. This includes solid waste franchises, new competitive markets E&P waste facilities, and several tuck ins of operations in or adjacent to our current footprint and solid waste.

Ron: We continue to maintain our focus on solid waste with a proven market selection strategy and a track record for integrating and maximizing value.

Ron: As we say more important than completing acquisitions is their implementation and as noted earlier regarding Q3, we're pleased to see performance out of our acquired operations above our expectations.

Ron: Additionally, acquisitions completed in 2024 should provide for approximately 2% or more in acquisition rollover contribution in 2025 with the potential for that to grow from additional transactions in Q4 and next year.

Ron Okay: In 2024, our biggest share since our founding in 1997.

Ron: While maintaining capacity for outside of the acquisition activity, we continue to reinvest in the business and expand our return of capital to shareholders as.

Ron Okay: Today, we have signed or closed over $700 million in annualized private company revenue. This.

This includes solid waste franchises, new competitive markets E&P waste facilities, and several tuck ins of operations in or adjacent to our current footprint and solid waste. We continue to maintain our focus on solid waste with a proven market selection strategy and a track record for integrating and maximizing value as we.

Ron: As anticipated the strength of our operating performance free cash flow generation and balance sheet positioned us for another double digit increase to our quarterly cash dividend demonstrate.

Ron: Demonstrating once again the compatibility of funding our differentiated growth strategy and acquisition activity, along with an increasing return of capital to shareholders.

Ron Okay: Say more important than completing acquisitions is their implementation.

Ron: To that end our board of directors authorized a 10, 5% increase to our regular quarterly cash dividend, our 14th consecutive annual double digit increase since the initiation of the dividend in 2010.

Ron Okay: And as noted earlier regarding Q3, we're pleased to see performance out of our acquired operations above our expectations.

Ron Okay: Additionally, acquisitions completed in 2024 should provide for approximately 2% or more in acquisition rollover contribution in 2025 with the potential for that to grow from additional transactions in Q4 and next year.

Ron: While executing our growth strategy with demonstrated significant progress towards achievement of our sustainability related targets, which are inextricably linked to our focus on value creation and our businesses as highlighted in our 2020 for sustainability report being released today.

Ron Okay: While maintaining capacity for outside of the acquisition activity, we continue to reinvest in the business and expand our return of capital to shareholders.

Ron: In fact with multi year reductions of 40% in emissions intensity and 13% in absolute emission declines our results demonstrate that outsized growth is compatible with the achievement of our long term aspirational ESG targets.

Ron Okay: As anticipated the strength of our operating performance free cash flow generation and balance sheet positioned us for another double digit increase to our quarterly cash dividend demonstrating once again the compatibility of funding our differentiated growth strategy and acquisition activity, along with an increasing return of capital to shareholders.

Ron: I am, particularly pleased by the notable momentum from reductions in voluntary turnover and the related impacts the safety related metrics both of what's showing ongoing improvement in 2024.

Ron Okay: To that end our board of directors authorized a 10, 5% increase to our regular quarterly cash dividend, our 14th consecutive annual double digit increase since the initiation of the dividend in 2010.

Ron: In Q3 voluntary turnover was down for the eighth consecutive quarter for a total reduction of over 40% from the peak in 2022, and we have seen a corresponding reduction in open positions down over 50% in that period.

Ron Okay: While executing our growth strategy, we have demonstrated significant progress towards achievement of our sustainability related targets, which are inextricably linked to our focus on value creation in our business as highlighted in our 2020 for sustainability report being released today in.

Ron: Similarly safety incident rates have shown continuous improvement now down over 15% from 2022 levels as we reinforce our most important operating value and work every day to recognize and proactively address unsafe behaviors.

Ron: Our updated sustainability report also highlights our progress on increasing resource recovered through both the processing of recyclables and the recovery and beneficial use of landfill gas through renewable natural gas or LNG generation.

Ron: We continue to make progress towards the development of our portfolio of new LNG facilities expected online in 2026.

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 our updated full year 2020 for outlook and a detailed outlook for Q4 I will then wrap up with some thoughts about 2025 before heading into Q&A.

Thank you Ron.

Mary Anne: In the third quarter revenue of $2 33, 8 billion was above our outlook and up $274 million or 13, 3% year over year acquisitions completed since the year ago period contributed about $161 million of revenue in the quarter net of divestitures Corp.

Mary Anne: Core pricing of six 8% range for over 5% in our primarily exclusive market Western region up to approximately seven 5% in our competitive regions.

Mary Anne: Volumes increased sequentially by 90 basis points with gains across several geographies, most notably our eastern region were acquisition related shedding and the non renewal of certain municipal contract had impacted prior periods. Additionally activity picked up in certain markets, most notably in our western region, where <unk>.

Total volumes were up 3% year over year, which would be a strong quarter, even in a high growth environment. This outsized increase was led by special waste activity up 20% year over year in our Western region.

Mary Anne: Looking year over year in other lines of business rollout pulls per day were down 3% on revenue per pull up about 5% September was the weakest month down 5% year over year and reflected the initial impact of hurricane to lean in several markets in Florida, Georgia, North Carolina and Tennessee.

Mary Anne: Landfill tons were down nominally year over year on higher MSW tons up 5% offset by special waste down, 10% and CND tons down 6%.

Ron Okay: 90 basis points with gains across several geographies, most notably our eastern region were acquisition related shedding and the non renewal of certain municipal contracts had impacted prior periods.

Mary Anne: Special waste activity in Q3, while still down year over year improved sequentially and what was the toughest comp from last year.

Ron Okay: Additionally activity picked up in certain markets, most notably in our Western region, where total volumes were up 3% year over year, which would be a strong quarter, even in a high growth environment. This outsized increase was led by special waste activity up 20% year over year in our Western region.

Mary Anne: This performance includes that outsized contribution from our Western region and reflects a few jobs getting pulled forward from Q4, a reminder of the event driven nature and inherent lumpiness of these projects.

Mary Anne: Moving next to revenues from recovered commodity landfill gas sales were up 15% in Q3, due primarily to higher volumes and higher value for renewable energy credits or Rins and.

Ron Okay: Looking year over year at other lines of business roll off pulls per day were down 3% on revenue per pull up about 5% September was the weakest month down 5% year over year and reflected the initial impact of hurricane to lean in several markets in Florida, Georgia, North Carolina and Tennessee.

And recycle commodity revenues up 55% year over year ex acquisitions were down nominally on a sequential basis as prices weakened during the quarter. Moreover, since quarter end commodity values have dropped by approximately 15% as a result of recent slowdowns associated with the port strike and weaker demand with it.

Ron Okay: And landfill tons were down nominally year over year on higher MSW tons up 5% offset by special waste down, 10% and CND tons down 6%.

Potential for another 5% to 10% near term reduction in Q4.

Ron Okay: Special waste activity in Q3, while still down year over year improved sequentially and what was the toughest comp from last year.

Mary Anne: Adjusted EBITDA for Q3 as reconciled in our earnings release increased by 17, 3% year over year to $787 4 million.

Ron Okay: This performance includes that outsized contribution from our Western region and reflects a few jobs getting pulled forward from Q4, a reminder of the event driven nature and inherent lumpiness of these projects.

Mary Anne: At 33, 7% of revenue our adjusted EBITDA margin was up 110 basis points sequentially from Q2, and up 120 basis points year over year. This outsized margin expansion was in line with the increased expectations. We provided in July and reflects the outperformance in our core solid waste.

Ron Okay: Moving next to revenues from recovered commodities landfill gas sales were up 15% in Q3, due primarily to higher volumes and higher values for renewable energy credits or Rins and.

Mary Anne: Where we overcame both the drag from additional acquisition contributions coming on it's dilutive margins.

Ron Okay: And recycled commodity revenues up 55% year over year ex acquisitions were down nominally on a sequential basis as prices weakened during the quarter. Moreover, since quarter end commodity values have dropped by approximately 15% as a result of recent slowdowns associated with the port strike and weaker demand with the <unk>.

Mary Anne: And incremental costs associated with hurricane preparation and related impacts.

Mary Anne: Net interest expense of $82 million reflects a weighted average cost of debt of just over 4% on a mix of approximately 82% fixed and 18% variable rate debt with an average tenure of almost 10 years.

Ron Okay: Potential for another 5% to 10% near term reduction in Q4.

Mary Anne: Leverage move nominally in the quarter to about $2 seven one times debt to EBITDA.

Mary Anne: Our tax rate for Q3 was 23% slightly lower than expected and year to date adjusted free cash flow of $1 <unk> 4 billion or 15, 7% of revenue is on track for our full year adjusted free cash flow outlook of $1 2 billion.

Mary Anne: I will now provide an updated full year 2020 for outlook and a detailed outlook for the fourth quarter of 2024 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.

Mary Anne: In Canada, we encourage investors to review these factors carefully.

Mary Anne: 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.

Mary Anne: Looking first at our updated outlook for the full year as provided for and reconciled in our earnings release.

Mary Anne: Revenue is now estimated at approximately $8 9 billion up $150 million from our original outlook and.

Mary Anne: Adjusted EBITDA for the full year is now estimated at approximately $2 91 billion up $50 million from our original outlook.

Mary Anne: Adjusted EBITDA margin of 32, 7% reflects a 120 basis point year over year increase for 2024, and adjusted free cash flow of $1 2 billion is in line with our original outlook.

Mary Anne: Looking next at Q4 revenue is estimated to be approximately $2. Two 4 billion and adjusted EBITDA is estimated at approximately $740 million or 33% of revenue.

Mary Anne: Normalized for the sequential decline in commodity values special waste timing and incremental dilution from acquisitions completed during Q3 margin expansion is expected to be <unk>.

Comparable to recent quarters.

Mary Anne: Any improvement in commodity driven revenues are incremental volumes associated with hurricane related cleanup activity would be additive to our outlook for Q4.

Mary Anne: Depreciation and amortization expense for the fourth quarter is estimated at about 13, 4% of revenue, including amortization of intangibles of about $55 million or about <unk> 15 per diluted share net of taxes.

Mary Anne: Interest expense net of interest income in Q4 is estimated at approximately $82 million and finally, our effective tax rate in Q4 is estimated at about 23, 5% subject to some variability.

Ron Okay: 2.24 billion and adjusted EBITDA is estimated at approximately $740 million or 33% of revenue.

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

Ron: Thank you Marianne.

Ron Okay: Normalized for the sequential decline in commodity values special waste timing and incremental dilution from acquisitions completed during Q3 margin expansion is expected to be <unk>.

Ron: Again, we are quite pleased that our financial results continue to track above the increased expectations. We communicated in July setting us up for another increase to our full year outlook to revenue of $8 9 billion and adjusted EBITDA of $2 $91 billion that puts our 2024 year over year growth at over 10 <unk>.

Comparable to recent quarters.

Ron Okay: Any improvement in commodity driven revenues or incremental volumes associated with hurricane related clean up activity would be additive to our outlook for Q4.

Ron: <unk> in revenue and over 15% and adjusted EBITDA.

Ron Okay: Depreciation and amortization expense for the fourth quarter is estimated at about 13, 4% of revenue, including amortization of intangibles of about $55 million or about <unk> 15 per diluted share net of taxes.

Ron: Additionally, we are encouraged by the ongoing improvements in employee retention and safety, which continue to provide for longer term savings opportunities. We're also thrilled with the integration and performance of record levels of private company acquisition activity.

Ron Okay: Interest expense net of interest income in Q4 is estimated at approximately $82 million and finally, our effective tax rate in Q4 is estimated at about 23, 5% subject to some variability.

Ron: <unk> us for a strong start to 2025.

Ron: Although not providing our formal outlook for 2025 until February we're able to provide a high level framework, assuming no change in the current economic environment.

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

Ron: On that basis, we should be positioned for high single digit adjusted EBITDA growth in 2025 unexpected mid to high single digit revenue growth, including price led organic growth and solid waste plus approximately 2% revenue carryover from the record levels of private company acquisition activity expected to be equated in completed in.

Ron Okay: Okay. Thank you Marianne.

Ron Okay: We are quite pleased that our financial results continue to track above the increased expectations. We communicated in July setting us up for another increase to our full year outlook to revenue of $8 9 billion and adjusted EBITDA of $2 $91 billion that puts our 2024 year over year growth over 10%.

Ron: <unk> 2024, with the potential for that amount to grow depending on the pace of acquisitions.

Ron Okay: In revenue and over 15% and adjusted EBITDA. Additionally.

Ron: Additionally to the extent that we see improvement in commodity values or easing of cost pressures during the year those impacts would be additive to these preliminary thoughts.

Ron Okay: Additionally, we are encouraged by the ongoing improvements in employee retention and safety, which continue to provide for longer term savings opportunities.

Ron: Adjusted free cash flow conversion would be expected to remain in the current range of 45% to 50% of adjusted EBITDA normalized for ongoing impacts of R&D related capex and closure related outlays.

Ron Okay: We are also thrilled with the integration and performance of record levels of private company acquisition activity positioning us for a strong start to 2025.

Ron Okay: Although not providing our formal outlook for 2025 until February.

Ron: We look forward to having better visibility on the tone of the economy, including any implications from the upcoming election as well as expected commodity driven activity in hurricane related impacts when we provide our formal outlook in February.

Ron Okay: We will provide a high level framework, assuming no change in the current economic environment.

Ron: I want to conclude by recognizing our 24000 employees, who embody our core values and drive our results their actions speak louder than words and are a testament to the culture of accountability that we believe sets us apart.

Ron: Specifically I want to acknowledge the work of our teams to manage and address the challenges of recent severe weather <unk>.

Ron: <unk> two major hurricanes in the southeast over a two week period.

Ron: I couldnt be proud of their efforts to support our teams, putting safety and well being first while also providing essential services to promote public health and welfare.

<unk> challenging conditions their commitment as demonstrated by preparedness and diligence exemplifies servant leadership and truly changes lives. We're humbled by the commitment of all our frontline employees, who strive for excellence every day.

We also 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.

Speaker Change: Thank you we will now begin the question and answer session to ask a question you May Press Star then one on your telephone keypad.

Speaker Change: Youre using a speakerphone please pick up your handset before pressing the keys. So anytime your question has been addressed and you would like to withdraw it. Please press Star then two at.

Speaker Change: At this time, we will pause momentarily to assemble the roster.

Speaker Change: And this morning's first question comes from Kevin Chiang with CIBC.

Kevin Chiang: Hi, Thanks for taking my question and congrats on a good Q3 Q3 print there.

Maybe if I could just start with.

Kevin Chiang: Comments on the special waste you saw some pull forward from from Q4 into Q3.

Speaker Change: Broadly speaking.

Speaker Change: Are you seeing any changes in customer activity related to the electric I'm wondering if some of this activity was pulled forward.

Speaker Change: Maybe some people will try to get some of that could be ahead of ahead over the election, I guess a couple of weeks here.

Speaker Change: Good morning, Kevin No I don't think we say its specifically related to elections, I mean that can influence behavior more broadly, but we'd say specifically the projects we referenced it with things that we had expected maybe they'd gotten delayed a couple of times and we have been pegged for Q4 and they actually got done in Q3.

Speaker Change: As simple as that and it was primarily on the West coast as we mentioned.

Speaker Change: Okay.

Speaker Change: Helpful.

And then congrats on the royalties steel.

Speaker Change: You will have like a 17 zones in total.

Speaker Change: I believe when the when the commercial zone.

Speaker Change: Those are initially.

Speaker Change: Pushed through.

Speaker Change: I think the maximum 15, so just just wondering does that requires it.

Speaker Change: The venue zones or.

Speaker Change: I guess because.

Speaker Change: You acquired these other far through M&A that you can.

Speaker Change: You can manage all 17 or you'll be allowed to oversee all 17 zone.

Speaker Change: Yeah, Kevin Okay.

Speaker Change: To clarify number one the cap on any individual company is 15 as you rightly pointed out.

Speaker Change: Year more broadly, but we'd say specifically the projects we referenced it was things that we had expected maybe they'd gotten delayed a couple of times and we had them pegged for Q4 and they actually got done in Q3, it's as simple as that and it was primarily on the west coast as we mentioned.

However, if there is overlap.

Speaker Change: That does not necessarily count as a new incremental zone and there was overlap in some of the zones at Royal waste and we had it actually made US go to 16 and so there was one zone that we in effect are swapping out of.

Speaker Change: Okay. That's helpful.

Speaker Change: Congrats on the World, we still didn't know they don't have like a 17 zones in total.

I believe when the when the commercial zone.

Speaker Change: Because we would have been at <unk> and that was part of the consent process with the big So we we are at the cap of 15 zones.

Speaker Change: The older initially pushed through and approved I think the maximum 15. So just just wondering does that require you to divest of any zones or I guess because you you acquired these other far through M&A, but you can you can you.

Speaker Change: 17.

Speaker Change: And so that is that is how that works.

Speaker Change: Thank you for the clarification there.

Speaker Change: And then maybe just last one for me and I know this is tough to tell.

Speaker Change: You can manage all 17 or you'll be allowed to adopt to oversee all southern zones.

Speaker Change: But to predict but.

Speaker Change: RIN prices have been north of $3 pretty consistently here.

Speaker Change: Yeah, Kevin Okay.

Speaker Change: Clarify number one the cap on any individual company is 15 as you rightly pointed out.

Do three pricing its basically at the upper end of where we've seen this.

Trend over the past few years here.

Speaker Change: However, if there is overlap.

Speaker Change: I guess the volume targets go out to 2025.

Speaker Change: That does not necessarily count as a new incremental zone.

Speaker Change: Just wondering what your thoughts are as the EPA might restart these targets do you see risk to win pricing do you think.

Speaker Change: And there was overlap in <unk>.

Speaker Change: Some of the zones at Royal waste and we had it actually made US go to 16 and so there was one zone that we in fact are swapping out of.

Speaker Change: Lower the volume targets in the next three year balance just depending I guess preliminary thoughts here.

Speaker Change: The 2024.

Speaker Change: Well it is a reminder, renz, our commodity not only a commodity theyre subsidized right. So there is inherent uncertainty, which from our perspective really underscores the importance of the hybrid strategy, we've chosen and taking the opportunity to hedge opportunistically as we have this year at about $3.

Does we would've been at 16 and that was part of the consent process with the big So we.

Speaker Change: We are at the cap of 15 zones not 17.

Speaker Change: And so that is that is how that works.

Speaker Change: Thank you for the clarification there.

Speaker Change: And then maybe just last one for me and I know this is tough to tough to predict but.

Speaker Change: Because there is uncertainty so we don't have a crystal ball any any better than anyone else's, but as we said as I said I think the way we've approached RMG more broadly and mitigating the risk of movement in rins through the structures and then opportunistic hedges as a way to address that uncertainty.

Speaker Change: RIN prices have been north of $3 pretty consistently here.

Speaker Change: Three pricing its basically at the upper end of where we've seen this.

Speaker Change: The trend over the past few years here.

Speaker Change: I guess the volume targets go out to 2025.

Speaker Change: Thank you very much for taking my questions.

Speaker Change: Just wondering what your thoughts are as the EPA might restart these targets do you see risk to RIN pricing do you think they are.

Speaker Change: Thank you Kevin.

Speaker Change: Thank you and the next question comes from Noah Kaye with Oppenheimer.

Noah Kaye: Hey, thanks very much.

Noah Kaye: I wanted to pick up on the comments around the.

Noah Kaye: The outlook for cost inflation.

Speaker Change: I think.

Noah Kaye: In our seat looking at maybe a little bit hotter CPI in inflationary trends a little bit of potential Reacceleration. What are you seeing in the business around the current pace of unit cost inflation and how does that inform your thinking about pricing as we get ready for next year.

Noah Kaye: Sure. So what we see now is pretty similar to what we've seen in recent quarters, which is that inflation cost.

Noah Kaye: Cost inflation in our business continues to be in that 4% to 5% range and then wage inflation, which of course labor being the most important driver for our numbers sits at the high end or even above the high end of that range. So I think the read through on that is to continue to have the need for outside.

Noah Kaye: Spread between price and headline CPI is what we think that means and Thats certainly what we think about as we prepare ourselves for 25.

Speaker Change: Okay, Great and then just a little bit of a housekeeping I guess combination of <unk> and <unk>.

Speaker Change: And I think you mentioned that margin expansion in <unk> would be similar to the 120 bps.

Speaker Change: Directionally that you saw in <unk>, but for a couple of factors so.

Speaker Change: Those aggregate factors roughly around 30 to 40 bps.

Speaker Change: Margin impact the commodities the storms and in May.

Yes, a little bit more M&A is that the right way to think about it.

Speaker Change: Yes, I'd say, it's arguably even a little north of that because if you think about what underlying margins really did in Q3 I mean, we adjusted for the factors that we mentioned, we really delivered 34%. If you think about it so up 150 basis points, because we overcame the incremental margin dilution you actually.

Commodities weaken a little in Q3, not the big drop we saw in Q4, we had a little movement there and so.

Speaker Change: So then when I think about Q4, I would say in the aggregate those factors that you mentioned or even north of that they're closer to 60% 60 basis points, which really gets you back up to that same type of level.

Speaker Change: Okay very helpful. Thank you.

Speaker Change: Thank you and the next question comes from Jerry Revich with Goldman Sachs.

Hi, Good morning. This is Adam <unk> on for Jerry Rabbit I'm wondering if you can just update us on how landfill gas investments are tracking.

Speaker Change: And how much is that set to contribute.

Contribute in 2024, what could be the possible incremental step up next year.

Speaker Change: Yeah, So I think.

Good news Bad news on this Adam.

Speaker Change: <unk>.

Speaker Change: There is we have brought on three new facilities in 24 at this point and a fourth has just going through its initiation phase to be certified so we will get for on line. This year and that was our expectation there has been certainly delays in.

Speaker Change: In those projects.

Speaker Change: Seemingly is happening and most of them both from a logistics standpoint, and a permitting standpoint.

Speaker Change: But they are getting done before were bringing on this year are some of our smaller ones, we will be bringing on so it's a pretty de minimis impact to 2004, the impact of <unk> 25 is a little greater but still fairly low and most of our large projects don't come on until the very end of 'twenty five and throughout two.

Speaker Change: <unk> thousand six so they they really begin construction in 2005, so youre going to see a little step up improvement in 'twenty five over 24, and then quite a step up in 'twenty six and then a full impact as 27 comes through on a run rate basis coming out of 26.

Speaker Change: And then how should we be thinking about growth Capex next year compared to 2024.

Speaker Change: And is there a potential for a free cash flow conversion inflection just on a higher margin base and as these landfill gas investments start to ramp.

Speaker Change: Well, yes, we gave our preliminary framework.

Speaker Change: We typically give the detailed guidance in February as you know and we talked about the fact that that on a normalized basis that conversion, we would expect to be similar at this point in time I can appreciate what you are asking is there an opportunity from those incremental RMG contributions, which as Ron said, we don't think are.

<unk> large projects don't come on until the very end of 'twenty five and throughout 2006. So they they really begin construction in 2005, so youre going to see a little step up improvement and twenty-five over 24, and then quite a step up in 'twenty six and then a full impact as 27 comes.

Speaker Change: Niculae meaningful next year, given the timing of the <unk> projects coming online, but the other factor of course I would remind you of is we also know that commodity is based on where they are right now it would be a slight drag year over year next year and so right now very high level I think of maybe one offsetting the other which is why when we gave our preliminary.

Speaker Change: Through on a run rate basis coming out of 26.

Speaker Change: And then how should we be thinking about growth Capex next year compared to 2024.

Speaker Change: Our thoughts for the year, we didn't mention either.

Speaker Change: And is there a potential for a free cash flow conversion inflection just on a higher margin base and as these landfill gas investments start to ramp.

Speaker Change: Obviously, Adam the only thing I would add is as I said, we have.

Speaker Change: Full contribution of the full year in 2007 as of RMG, meaning you are effectively done with your capex by the end of 2006 on those and at that point you have the full EBITDA contribution and no real.

Speaker Change: Well, yes, we gave our preliminary framework.

We typically give the detailed guidance in February as you know and we talked about the fact that that on a normalized basis. The conversion we would expect to be similar at this point in time.

Speaker Change: Capex contribution and that certainly is an inflection point to a higher level of conversion.

Speaker Change: I appreciate what you are asking is there an opportunity from those incremental RMG contributions, which as Ron said, we don't think are particularly meaningful next year, given the timing of the <unk> projects coming online.

Speaker Change: Great. Thanks, so much.

Speaker Change: Thank you and our next question comes from Tyler Brown with Raymond James.

Tyler Brown: Hey, good morning.

Speaker Change: Morning, Tyler.

Tyler Brown: Real quick I think you may have actually answered my question, a second ago, but on the margins just in Q3, I think they were up 120 basis points, but it sounds like M&A and storms, where maybe 30 basis points of a drag is that right just basically getting to the fact that core margins were lets call. It very very solid this quarter.

But the other factor of course I can.

Speaker Change: Mind you of is we also know that commodities based on where they are right now it would be at.

Speaker Change: Drag year over year next year, and so right now a very high level I think of maybe one offsetting the other which is why when we gave our preliminary thoughts for the year, we didn't mention either.

Speaker Change: Obviously, Adam the only thing I would add is as I said, we have full.

Speaker Change: Yeah, what I'd say is 30 basis points for those two factors you said and then as I mentioned, there was some incremental weakness in commodities, which also influenced.

Speaker Change: Full contribution of the full year in 2007 as of RMG, meaning you are effectively done with your capex by the end of 2006 on those and at that point you have the full EBITDA contribution and no real.

Speaker Change: Okay.

Sure.

Speaker Change: Okay.

Speaker Change: Did you gave an OTC price can you update us on what OTT for Q3.

Speaker Change: Capex contribution and that certainly is an inflection point to a higher level of conversion.

Speaker Change: And then any updated on your commodity sensitivity to ACC.

Speaker Change: Sure so.

Speaker Change: Great. Thanks, so much.

The average for Q3 was $139 and my point about the weakness coming into the quarter, we'd expected 145 that's.

Speaker Change: And that's where it was in July.

Speaker Change: And they've.

Speaker Change: Now stepped down in about a 10% move on the basket more broadly is about $25 million.

Speaker Change: Okay, Perfect and then Ron.

Ron just I was hoping if we could get an update on seating we're about a year removed from that of an escalating.

Speaker Change: There is some chatter in the market some some articles in the news.

Help us understand the latest here and then maybe any update on your spending plans for Tito here in 'twenty, four and then into 'twenty five.

Speaker Change: One color I appreciate it.

Speaker Change: Sure no problem.

Speaker Change: The short version Tyler is Chiquita is proceeding basically along the same plan that we originally thought the reaction area is an area of about 39% to 40 acres.

We've made substantial progress on the reaction.

Speaker Change: Throughout the course of 'twenty four.

Speaker Change: Give you some statistics.

Speaker Change: We have drilled 240 wells in and around the reaction area that is complete we have put submersible pumps and about 55% to 60% of our wells, we will finish the remaining.

Speaker Change: Submersible pumps through the course of Q4, maybe a little trickle into Q1.

Speaker Change: We believe that the leachate level has effectively peaked in Q3 as we thought it would and started to come back down by about 10% to 15% recently now as we add pumps that will go up a little bit before it really starts to drop as we get out of the first quarter of 'twenty five.

Speaker Change: In addition to that we have the reactionary or about 40 acres, we have capped with a geo synthetic cap over 99% of that at this point with only about <unk> three acres remaining to be done and that will be done over the next three to four weeks and then it will be full.

Speaker Change: Sealed from a cap standpoint, and I think most importantly, there was.

Speaker Change: A unified.

Speaker Change: Regulatory agency oversight Committee.

Speaker Change: Led by the EPA, along with various California state regulatory agencies and local regulatory agencies that were all involved in the reaction.

Speaker Change: Diligently on a day to day basis, along with our teams and our outside teams and that committee was abandoned.

Speaker Change: By the direction of the EPA two weeks ago.

Speaker Change: And returned to normal local regulatory oversight. So I think that's an indication of the agency's view of.

Speaker Change: You know where things are at that everything that is known to be done and working and proceeding along their expectations. So I would tell you that we're in.

Where we thought we would be.

Speaker Change: This is L. A this is a an election year.

Speaker Change: Very contested.

Speaker Change: Local and state election in and around the Southern California Basin with two weeks to go in the political process and I would say that 95% of what you read.

Speaker Change: In the media is political posturing, one day to the next as people are scraping for votes at the final hours.

Speaker Change: I think actually the reality of the agency's response speaks to the truth.

Speaker Change: The other is much like most political messages.

Speaker Change: Okay, Perfect and then just big.

Speaker Change: Make sure, though there should be.

Speaker Change: You guys can put a finer point on it.

Speaker Change: In February but the spend should step down just directionally.

Speaker Change: Oh sure Tyler with respect to as compared to 24.

Speaker Change: <unk> expenses should step down and yes, we will update our models have firmer numbers, but if you were looking for a place holder for how to think about 25 based on what we know today, we would estimate that to be in the range of $50 million to $75 million.

Speaker Change: Alright, thank you so much.

Speaker Change: Thank you and our next question comes from current Gupta with Scotiabank.

Speaker Change: Thanks, operator, and good morning, everyone.

Speaker Change: Just on the M&A Ron.

Speaker Change: You guys have done a lot of M&A. This year, obviously, it's an outsized so youre clearly and you are seeing the benefits in 2025, but.

Speaker Change: But as you look out obviously in aerospace right now the solid waste market.

Speaker Change: Holiday.

Speaker Change: A large degree obviously you spent a lot of opportunities you've mentioned and then let you know that your competitors are obviously involved in some sort of non solid waste.

Speaker Change: M&A processes right now.

Speaker Change: When we look out to 2025.

Speaker Change: What are some of the opportunities that you'd be looking at.

Speaker Change: Maybe and solid base are all set a solid baseline and what's really the focus here like that are you looking at more set up from an ROIC.

October one more sorry.

Speaker Change: Strategic perspective.

Speaker Change: So we really need more density.

<unk>.

Speaker Change: Yeah, well I mean, a lot of a lot of things within that question look.

Speaker Change: The M&A market is unchanged it remains robust.

Speaker Change: We continue to focus on the core solid waste opportunities.

Speaker Change: I think some of our larger competitors have focused on some areas outside of solid waste for for individual region reasons.

Speaker Change: The HSR.

Process remains difficult I think particularly in the more concentrated urban areas, where some of our larger competitors sit more broadly and that makes that a little more challenging on some solid waste acquisitions for them in a more suburban and franchise markets.

Speaker Change: That is less generally have an issue and so that has provided us I'd say a little more of a pathway in solid waste. So look we see we have no plans to pivot from the solid waste approach. Obviously, we've done some E&P stuff, which is we've been doing since 2012, that's nothing new.

Speaker Change: And we will continue to sort of stick to our knitting, we see a lot of opportunity there, where there's still $4 5 billion or so of private company opportunities in in markets that we are in or that.

Speaker Change: Our analogous to markets that we are in.

Speaker Change: We look at everything on a strategic basis first.

Speaker Change: To answer your question and then we look to.

Speaker Change: And IRR ROIC type.

Speaker Change: Type model.

Speaker Change: No matter the size of the transaction and we're looking at so.

Speaker Change: What youre going to see from US is more of the same as the way I would say.

Speaker Change: In our more suburban and franchise in our markets.

I mean, I can't sit here and tell you we're going to have a $700 million year next year, because that was a record year, but I can tell you we feel comfortable with.

Speaker Change: That is less generally of an issue.

Speaker Change: So that has provided us I'd say, a little more of a pathway in solid waste. So look we see we have no plans to pivot from the solid waste approach. Obviously, we've done some E&P stuff, which is we've been doing since 2012, that's nothing new.

Speaker Change: Exceeding our traditional sort of $150 million to $250 million.

Speaker Change: And it would probably be somewhere in between so I think we're set up for a very good year.

Speaker Change: And we will continue to sort of stick to our knitting, we see a lot of opportunity there where there is still $4 5 billion or so of private company opportunities in in markets that we are in or that.

Speaker Change: That's great color. Thanks.

Speaker Change: In terms of the storms and the opportunities around that.

Speaker Change: Can you size them up for US maybe in terms of what are you looking for from cleanup perspective, as well as some of these communities will obviously be a rebuilding so there might be some construction activity required there so any thoughts on the opportunity there in the next few months.

Speaker Change: Our analogous to markets that we are in.

Speaker Change: We look at everything on a strategic basis first.

Speaker Change: To answer your question and then we look to <unk>.

Speaker Change: Morale ROIC.

Speaker Change: Light model.

Speaker Change: No matter the size of the transaction and we're looking at so.

Speaker Change: Yeah look I think.

Speaker Change: What youre going to see from US is more of the same as the way I would say.

Speaker Change: We're only less than a couple of weeks into the aftermath of two pretty devastating hurricanes.

Speaker Change: I mean, I can't sit here and tell you we're going to have a $700 million year next year, because that was a record year, but I can tell you we feel comfortable with it.

Speaker Change: Between Helene and Milton as you know and.

Speaker Change: I think to.

Speaker Change: Exceeding our traditional sort of $150 million to $250 million.

Let's say as we said in our comments look initially in that first month to two months after the hurricane.

Speaker Change: And it would probably be somewhere in between so I think we're set up for a very good year.

Initially impacts you a little negatively.

On some of your cost structure and and just the market has to settle down and people have to get back to <unk>.

Speaker Change: That's great color. Thanks.

Speaker Change: In terms of the.

Speaker Change: Strong and the opportunities around them.

Speaker Change: Figure out what their insurance opportunities are et cetera, but then what we see in the generally three to four quarters. Following that is we see if our landfills are positioned well.

Speaker Change: Can you size the month for US maybe in terms of what are you looking for from cleanup perspective as well as some.

Speaker Change: These communities will obviously be a rebuilding so there might be some construction activity required there so any thoughts on the opportunity there in the next few months.

Speaker Change: We see a reasonable opportunity now I'm not I'm not saying this is the case because we don't know it's too early right.

Speaker Change: Yeah look I think.

Speaker Change: We're only less than a couple of weeks into the aftermath of two pretty devastating hurricanes.

Speaker Change: But hurricane in which was the last major hurricane that hit at the end of 'twenty two.

Speaker Change: You may or may not know, but we reported about $15 million in incremental revenue at our landfill.

Speaker Change: Between Helene and Milton as you know and.

Speaker Change: I think to let's say as we said in our comments look initially in that first month to two months after the hurricane.

Speaker Change: In sell in Western Florida.

Speaker Change: On the following four quarters of the hurricane.

Speaker Change: It initially impacts you a little negatively.

Speaker Change: Now in the case of Hurricane Ian we really only had one landfill in the area of impact. This time, we've got to arguably three.

Speaker Change: On some of your cost structure.

Speaker Change: And just the market has to settle down and people have to get back to and figure out what their insurance opportunities are et cetera, but then what we see in the generally three to four quarters. Following that is we see if our landfills are positioned well.

If it is similar we should see probably something in north of that.

Speaker Change: But but it's really too early to tell you.

Speaker Change: But that gives you an idea of the type of.

Speaker Change: That we see a reasonable opportunity now I'm not I'm not saying this is the case because we don't know it's too early right.

Speaker Change: Of impacts at a major hurricane can have depending on your asset positioning.

Speaker Change: That's great color. Thanks, so much appreciate the time.

Speaker Change: But hurricane in which was the last major hurricane that hit at the end of 'twenty two.

Speaker Change: Okay.

Speaker Change: Thank you and the next question comes from Chris Murray with a TV capital markets.

Chris Murray: Yes, thanks folks good morning.

Chris Murray: Maybe can you spend some time talking a little bit about the E&P business.

Not only kind of a conventional business, but maybe if we get some color maybe on how the.

Chris Murray: The integration with secure assets are going and I think he also made comments.

Chris Murray: In your in your script that you actually had maybe done some small E&P acquisition. So any color on how youre seeing the business evolving and that integration going would be helpful. Thank you.

Speaker Change: Sure. Thank you Chris.

Chris Murray: Look.

Our E&P business right now.

Chris Murray: <unk> is performing very well.

I'd say, we're sort of firing on all cylinders within our legacy business in the U S.

Chris Murray: It's up about 10% year over year, despite rig activity being down.

Chris Murray: And that is led by a strong activity in the Permian, Our our 360, Canada business, which is what we call the former secure business you referenced.

Chris Murray: <unk> is in line and actually better in revenue and EBITDA than our original expectations that we provided on that transaction.

Chris Murray: We have done an additional bolt on acquisition to our 360, Canada.

Chris Murray: This year, we have done.

Chris Murray: Another additional bolt on acquisition in the Permian to solidify our position.

Chris Murray: So you know look.

Chris Murray: Our E&P business is a disposal and transfer business.

Chris Murray: That is what it has always been.

Chris Murray: And that is why it's such a high margin business, we're not any in any logistics component business or transportation businesses within any E&P. We are really just purely a disposal business for solids and some piped water.

Right now I would tell you that that business is about a run rate of $550 million.

Chris Murray: It's about $300 million in the U S about $250 million in Canada.

Chris Murray: So I think that puts it probably about five 8% to 6% of total revs.

Chris Murray: About 888, 2% of EBITDA.

Chris Murray: Very comfortable with those numbers.

Chris Murray: And those percentages.

Chris Murray: But I think if you expect if you stick to the disposal piece of this business, that's a 50% type business like our disposal businesses in our normal solid waste as well.

Chris Murray: So that's how we think of the business.

Chris Murray: And and we will continue to do some more there opportunistically I don't ever see it becoming more than it is as a percentage.

Chris Murray: But it's a good business.

Okay. That's helpful.

My other question and it kind of goes.

A bit to the people and culture piece of it so.

Speaker Change: I think he made the comment that turnover is down.

Speaker Change: About 40%, so maybe a little bit of color.

Speaker Change: Well.

Speaker Change: What that means I am assuming that would take your your terminal youre kind of turnover number into the low double digits.

Speaker Change: But maybe if you want to clarify that but the other piece of that.

Speaker Change: And when I think about doing such a large number of acquisitions in the year.

Speaker Change: And I appreciate that it's not a massive number of folks.

Speaker Change: Relative to the rest of the organization, but.

Speaker Change: Any thoughts around that.

Kind of effort you have to go through in terms of integrating.

All of these businesses in terms of.

Either servant leadership or sort of a cultural attributes for connections that are maybe a little bit unique in how do you preserve that culture as you continue to get bigger, especially if you keep on this pace of acquisitions.

Speaker Change: Well very good question.

Speaker Change: Number one I think youre actually hitting on arguably the most important thing that we do and the greatest differentiator of our model and culture to be quite honest.

Speaker Change: And I'll tell you why but let me answer your question first.

Speaker Change: We reduced total turnover on a run rate basis in Q3 to about 24% total.

But our voluntary turnover, which is what we focus on the most is down.

Speaker Change: In the 13, 5% to 14% range and.

Speaker Change: And that is a quite dramatic drop over the last five or six quarters. Our target is to get that total turnover down from 24% down into the 19% to 20% level in 2025 and get that voluntary and down into the 10% level from the 13 five or so it is now so.

Speaker Change: We believe.

Speaker Change: Those are again value drivers that we will see that'll help outsized margin growth in 2025.

Speaker Change: Secondly look although.

Speaker Change: Have a record amount of transactions $700 million in revenue it'll end up being about 30% to 35 deals.

Speaker Change: When you think about it in that way you know your average deal is 20% to $25 million.

Speaker Change: Largest one being about 200, many being sub 10.

And so we operate from 570 locations.

Speaker Change: With over 350 P&L managers.

Speaker Change: The bite size of our acquisition transactions allows for very fast assimilation and our and our decentralized operating structure puts that responsibility for cultural integration at a local level.

Speaker Change: With our district management team, along with support from our divisional and regional and corporate teams. So we view speed of integration.

Speaker Change: As a huge cultural issue.

Speaker Change: Two changing trajectory of margin performance of the deal safety performance of the deal.

Speaker Change: Turnover performance of the deal pricing performance of a deal.

Traditionally those are not real strengths of private companies, sometimes they are such as in the case of Royal waste that I've mentioned.

Speaker Change: But there is somewhat unique.

Speaker Change: So speed and the insertion generally of our historical west connections operating manager financial manager marketing manager.

Speaker Change: La is critical and I think.

Speaker Change: <unk>.

Speaker Change: We avoid cultural dilution by that approach because otherwise M&A as something that can affect cultural dilution very quickly.

Speaker Change: And our service leadership led culture as we define it.

Speaker Change: Puts the auspice on our people to bring that team that we acquired up to our standard and help them be successful as quick as possible. So.

Speaker Change: You know its somewhat to be honest the secret sauce of what we do.

Speaker Change: Okay. That's helpful. All right folks thanks very much.

Speaker Change: <unk> the deal pricing performance of the deal.

Speaker Change: Traditionally those are not real strengths of private companies, sometimes they are such as in the case of Royal waste that I've mentioned.

Speaker Change: Thank you.

Speaker Change: Thank you and the next question comes from James Schumm with Cowen.

Speaker Change: But there are somewhat unique.

James Schumm: Hey, good morning, guys. Thanks for taking my questions. My first one just what are you seeing in terms of your churn rates in your non franchise markets.

Speaker Change: So speed and the insertion generally of our historical waste connections operating manager financial manager marketing manager.

And your ability to maintain price increases at these levels.

Speaker Change: It is critical and I think the you know.

Speaker Change: <unk>.

Speaker Change: Yeah, I mean, what I would tell you Jamie is that it continues to improve we were looking at this obviously in preparation for our budgeting process for 2025 in preparation for this call seeing how were doing year to date in all of our areas and it continues to improve our churn rate.

Speaker Change: We avoid cultural dilution by that approach because otherwise M&A as something that can affect cultural dilution very quickly.

Speaker Change: And our servant leadership led culture as we define it.

Speaker Change: Puts the auspice on our people to bring that team that we acquired up to our standard and help them be successful as quick as possible. So.

Speaker Change: Now is lower than it was in 2021 coming out of the pandemic and definitely lower than hyperinflation of 'twenty, two and 'twenty three we are back to sort of a pre.

Speaker Change: You know its somewhat to be honest the secret sauce of what we do.

Speaker Change: Okay. That's helpful. All right folks thanks very much.

Speaker Change: Thank you.

Speaker Change: Thank you and the next question comes from James Schumm with Cowen.

Speaker Change: 2020 level or there about.

Speaker Change: And obviously.

Speaker Change: When you have hyper inflation and youre, putting in double digit type rate increases youre going to see sort of maximum churn rates, so thats expected, but.

Speaker Change: Yes.

James Schumm: Hey, good morning, guys. Thanks for taking my questions.

James Schumm: The first one.

James Schumm: What are you seeing in terms of your churn rates in your non franchise markets.

Speaker Change: We are seeing that continuing to improve we target a retention of our of our price increases of north of 85% to 90%, we still remain comfortable with.

James Schumm: And your ability to maintain price increases at these levels.

Speaker Change: Yeah, I mean, what I would tell you Jamie is that it continues to improve we were looking at this obviously in preparation for our budgeting process for 2025 in preparation for this call seeing how were doing year to date in all of our areas and it continues to improve our churn rate.

Speaker Change: With those numbers and that's what we're getting.

Speaker Change: And again look you also saw our volume step up 90 basis points some of that is less.

Speaker Change: Less impact anniversarying of contracts, we shed, but some of it is also some improvement in churn.

Speaker Change: Now is lower than it was in 2021 coming out of the pandemic and definitely lower than hyperinflation of 'twenty, two and 'twenty three we are back to sort of a pre.

Speaker Change: Okay, great. Thank you and then just regarding Arrowhead are you diverting such large volumes of waste from the northeast such that it could impact pricing at northeast landfills or do you believe that your your arrowhead volumes will have a de minimis impact there.

Speaker Change: 2020 level or there about.

Speaker Change: And obviously.

Speaker Change: When you have hyperinflation and youre, putting in double digit type rate increases youre going to see sort of maximum churn rates, so thats expected, but.

Speaker Change: <unk>.

Speaker Change: I believe an accurate they would have a de minimis I think the reality is as much of what we're diverting.

Speaker Change: We are seeing that continuing to improve we target a retention of our of our price increases of north of 85% to 90%, we still remain comfortable with.

Speaker Change: And to use that term.

Speaker Change: I'd say, it's internalizing is volumes that work.

Speaker Change: <unk> that we're going to a third party until we got the capacity at Arrowhead and other sites to be able to do it. So no I do not believe so and in fact in some cases, we're diverting our own volume to be able to take higher priced volume.

Speaker Change: With those numbers and that's what we're getting.

Speaker Change: And again look it you also saw our volume step up 90 basis points some of that is <unk>.

Speaker Change: Less impact anniversarying of contracts, we shed, but some of it is also some improvement in churn.

Speaker Change: The third party markets in local areas, where they don't have as much choice. So if anything I think it actually is a boost too.

Speaker Change: Okay, great. Thank you and then just regarding Arrowhead are you diverting such large volumes of waste from the northeast such that it could impact pricing at northeast landfills or do you believe that Youre arrowhead volumes will have a de minimis impact.

Speaker Change: Disposal pricing in the northeast on a sustained basis.

Speaker Change: Okay, great. Thank you I'll turn it back.

Okay.

Thank you.

How about Congress RBC capital markets.

Speaker Change: Great Thanks, and good morning.

<unk> there.

Speaker Change: I believe an accurate they would have a de minimis I think the reality is as much of what we're diverting.

Speaker Change: A little bit about this last quarter as a macro is evolving but just wondering as you talk about 5% pricing.

Speaker Change: To use that term.

Speaker Change: Into 2025.

Speaker Change: I'd say, it's internalizing is volumes network.

Speaker Change: How are your perspectives evolving on the macro some of the cyclical units and as volumes in general and maybe some of the puts and takes if you can share on the volume front. Thanks.

Speaker Change: <unk> that we're going to a third party until we got the capacity at Arrowhead and other sites to be able to do it. So no I do not believe so and in fact in some cases, we're diverting our own volume to be able to take higher priced volume.

Speaker Change: Sure.

Speaker Change: To clarify on that preliminary framework, we provided for 25.

Speaker Change: That would imply kind of mid single digit price plus volume and so really where that ultimately shakes out how much is price what volumes ultimately look like will be provided when we do give guidance in February.

Speaker Change: The third party markets in local areas, where they don't have as much choice. So if anything I think it actually is a boost too.

Speaker Change: Disposal pricing in the northeast on a sustained basis.

What we can say is what we're seeing out there now and what the impact of our continued shedding in the contract non renewal that we've done which is what's driving the negative volumes. We're encouraged that we did see the improvement in our western region, but we acknowledge as I said in prepared remarks, 3% volume growth.

Speaker Change: Okay, great. Thank you I'll turn it back.

Yeah.

Speaker Change: Yes.

Speaker Change: Thank you.

Speaker Change: How about Congress RBC capital markets.

Speaker Change: Great Thanks, and good morning.

Speaker Change: A little bit about this last quarter as a macro the walgreens, but I'm just wondering as you talk about 5% pricing.

Would be very strong even in a strong economy that tells you. It's anomalistic. That's a piece of that is just timing of special waste, but again still encouraged if I look back to last quarter that same western region had volumes of one 5%. So underlying volumes are positive. That's a good thing, but the continued shedding of the continued.

Speaker Change: Into 2025.

Speaker Change: How are your perspectives evolving on the macro some of the cyclical units and as volumes in general and maybe some of the puts and takes if you can share on the volume front. Thanks.

Speaker Change: Sure. So just to clarify in that preliminary framework, we provided for 25, yes.

Speaker Change: <unk> that that shedding would persist until we've anniversaried all of them and so that will dictate the pace of the volume recovery on a reported basis and 25. So again, we will look forward to giving you that color when we give guidance in February.

Speaker Change: That would imply kind of mid single digit price plus volume and so really where that ultimately shakes out how much is price what volumes ultimately looks like will be provided when we do give guidance in February.

Speaker Change: What we can say is what we're seeing out there now and what the impact of our continued shedding in the contract non renewal at <unk>.

Speaker Change: Okay, Great and then Ron provided a bit of color on how you think about integration of M&A, just I guess in a high volume here like this sounds like the next year, maybe not as big but still a big one how are you guys sort of thinking about the integration of these and obviously a lot of them are maybe smaller deals, but just if you can just talk about the capacity to integrate these assets and also.

Speaker Change: One which is what's driving the negative volume. We're encouraged that we did see the improvement in our western region, but we acknowledge as I said in prepared remarks, 3% volume growth would be very strong even in a strong economy that tells you. It's anomalistic. That's a piece of that is just timing of special waste, but again.

Speaker Change: Maybe maintain maybe a bit of an above normal elevated pace into 2025 on the M&A front. Thanks.

Speaker Change: Still encourage if I look back to last quarter that same western region had values of one 5%. So underlying volumes are positive. That's a good thing, but the continued shedding or the continued impact of that setting would persist until we've anniversaried all of them and so that will dictate the pace.

Speaker Change: Yes, well first off just to clarify again, I, just said that hey, I am not sure that we can have another record year. It doesn't mean, we won't but as we sit here today, it's probably too early to say that.

Speaker Change: But what I did say is that we continue to believe that M&A will be elevated.

Speaker Change: And that we feel very comfortable with something in excess of our maybe historical 150 to 250, which is more of that.

Speaker Change: As the volume recovery on a reported basis and 25. So again, we look forward to giving you that color when we give guidance in February.

Speaker Change: Couple of two 3% type.

Speaker Change: Years.

Speaker Change: Okay, Great and then Ron provided a bit of color on how you think about integration of M&A, just I guess in a high volume here like this sounds like the next year, maybe not as big but still a big one how are you guys sort of thinking about the integration of these and obviously a lot of them are maybe smaller deals, but just if you can just talk about the capacity to integrate these assets and also <unk>.

This is what we said so I want to clarify that.

Look.

Speaker Change: If anything I think we're better set up now.

Speaker Change: Because we've reduced open head count by over 50%.

Speaker Change: Through the reduction of turnover and other initiatives.

And continuing to drive that lower into next year, we're better positioned to integrate more M&A than we have been maybe ever.

Speaker Change: We maintain maybe a bit of an above normal elevated pace into 2025 on the M&A front. Thanks.

Speaker Change: Yes, well first off just to clarify again, I, just said that hey, I am not sure that we can have another record year. It doesn't mean, we won't but as we sit here today, it's probably too early to say that.

Speaker Change: So it will be there will not be any excuse.

Speaker Change: Or an inability to integrate and oversee M&A as a reason there wouldn't be a record year. It would just be that thats opportunistic I think from an ability to handle it.

Speaker Change: But what I did say is that we continue to believe that M&A will be elevated.

Speaker Change: And that we feel very comfortable with something in excess of our historical 150 to 250, which is more of that a couple of two 3% type.

We're in the we're actually very very good shape right now.

Speaker Change: Okay, great. Thanks, very much for the color.

Speaker Change: Thank you and the next question comes from Stephanie <unk> with J P. Morgan.

Speaker Change: Years.

Speaker Change: This is what we said so I want to clarify that.

Speaker Change: Hi, good morning.

Speaker Change: Look.

If anything I think we're better set up now.

Speaker Change: Good morning, I wanted to ask if there's anything you're worried about as we're kind of heading into the election any potential changes that you might anticipate the waste industry.

Because we've reduced open head count by over 50%.

Speaker Change: Through the reduction of turnover and other initiatives.

Speaker Change: Well I mean, Stephanie number one we have no better crystal ball than you or any pull that's done every day that changes by the hour.

Speaker Change: And continuing to drive that lower into next year, we're better positioned to integrate more M&A than we have been maybe ever.

Speaker Change: You know look are we have operated under both Democratic or Republican presidency.

Speaker Change: So it won't be there will not be any excuse.

Speaker Change: Of an inability to integrate and oversee M&A as a reason there wouldn't be a record year. It would just be that that's opportunistic I think from an ability to handle it.

Speaker Change: As well as the Democratic or Republican.

Speaker Change: <unk> of Congress and it's our responsibility to react what comes in to Excel and do so and we've done that and we're confident we will continue to be I think theres puts and takes no matter what happens.

Speaker Change: We're in the we're in actually very very good shape right now.

Speaker Change: Okay, great. Thanks, very much for the color.

Speaker Change: Within the White house or within Congress.

Speaker Change: Thank you and the next question comes from Stephanie <unk> with J P. Morgan.

Speaker Change: There's nothing that we're we're afraid of from either.

Speaker Change: Hi, good morning.

One way you could say theres incremental regulation and some people say well that's more difficult well that provides us greater pricing leverage to be quite honest. The other way says well there'll be less regulation.

Speaker Change: Good morning, I wanted to ask if there's anything you're worried about as we're kind of heading into the election any potential change or that you might anticipate the waste industry.

Speaker Change: That provides us faster M&A track record. So I think there's there's benefits that you can derive from either they look a little different.

Speaker Change: Well I mean, Stephanie number one we have no better crystal ball than you or any pull that's done every day that changes by the hour.

Speaker Change: But.

Speaker Change: We're not we're not overly concerned about the outcome of the election other than rhetoric that it bleeds into the business.

Speaker Change: You know look are we have operated under both a democratic or Republican presidency.

Speaker Change: As well as the Democratic or Republican houses of Congress, and it's our responsibility to react what comes and to excel and do so and we've done that and we're confident we will continue to be I think theres puts and takes no matter what happens.

Speaker Change: You know I am questions. So.

Speaker Change:

Youll hear us have a plan either way too to excel next year.

Speaker Change: Okay I appreciate that.

Speaker Change: And just a clarification question I think there were comments that 2025 are still expecting above average underlying margin expansion I know on a reported basis. There are some headwinds like with commodity price erosion from the M&A in terms of the underlying margin expansion would you say.

Speaker Change: Yeah.

Speaker Change: The white house or within Congress.

Speaker Change: There's nothing that we're we're afraid of from either.

Speaker Change: One way you could say there is incremental regulation and some people say well that's more difficult well that provides us greater pricing leverage to be quite honest. The other way says well there'll be less regulation.

Speaker Change: Or do you expect it to be similar in 'twenty five to what you're anticipating or ceiling 'twenty four or will it be a little less just because the pricing and cost environment is changing.

Speaker Change: That provides us faster M&A track record. So I think there's there's benefits that you can derive from either they look a little different.

Speaker Change: But we're not we're not overly concerned about the outcome of the election other than rhetoric that it bleeds into the business.

Speaker Change: I think I think what you said is accurate I think you would see the underlying approximate close to what you saw in 2024, which was extremely strong but to your comment the reported might be a little less because you have some headwinds, particularly right now as you said such as.

Speaker Change: Questions. So.

Speaker Change:

Speaker Change: Youll hear us have a plan either way too to excel next year.

Speaker Change: Okay excellent.

Speaker Change: Such as commodities.

Speaker Change: With that.

Speaker Change: And then just a clarification question I think there were comments that 2025 are still expecting above average underlying margin expansion I know on a reported basis. There are some headwinds like what the commodity price maybe dilution from M&A, but in terms of the underlying margin expansion would you say.

Speaker Change: Such as some margin dilution from typical M&A at a high level of M&A that we've done.

Speaker Change: So it will still be.

On a reported basis quite above normal.

Speaker Change: But maybe not quite as high as 24 because of those headwinds only.

Speaker Change: Okay, great. Thank you.

Speaker Change: It's similar or do you expect it to be similar in 'twenty five to why you're anticipating your ceiling 'twenty four or will it be a little less just because the pricing and cost environment is changing.

Speaker Change: Thank you and the next question comes from Jamie Somerville with eight capital.

Speaker Change: Hi, Good morning, Thanks, taking my question.

Speaker Change: I was going to ask about M&A, but you've answered that quite clearly already in.

Speaker Change: I think I think what you said is accurate I think you would see the underlying approximate close to what you saw in 2024, which was extremely strong but to your comment the reported might be a little less because you have some headwinds, particularly right now as you said such as.

Speaker Change: In terms of you expect to exceed the $150 million to $215 million.

Speaker Change: Of deals so maybe just ask.

Speaker Change: Presumably thats.

Speaker Change: Gross without the impact of shedding.

Speaker Change: Can you maybe give an indication of.

Speaker Change: Such as commodities.

Net or the shedding impact that's reasonable to expect going forward in like shedding going to continue.

Speaker Change: Such as some margin dilution from typical M&A at a high level of M&A that we've done.

Speaker Change: So you know it will still be I think on a reported basis quite above normal.

Speaker Change: Similar rate to what we've seen.

Speaker Change: Well.

Speaker Change: Number one yes.

Speaker Change: But maybe not quite as high as 24 because of those headwinds only.

The M&A that we report is a is a gross dollar of run rate acquired revenue achieved you are correct. We give it in each period, what its contribution is in the in the quarters and the year on an actual basis.

Speaker Change: Okay, great. Thank you.

Speaker Change: Thank you and the next question comes from Jamie Somerville with eight capital.

Jamie Somerville: Hi, Good morning, Thanks, taking my question.

Speaker Change: The shedding is is a function of underwater or contracts that we elect not to renew based on either.

Speaker Change:

Jamie Somerville: I was going to ask about M&A, but you've answered that quite clearly already in terms of you expect to exceed the $150 million to $215 million.

Speaker Change: Our service and safety concerns or.

Speaker Change: Of deals so maybe just ask.

Speaker Change: Our financial return concerns.

Jamie Somerville: Presumably that's.

Speaker Change: Gross without the impact of shedding.

Speaker Change: And obviously.

Speaker Change: We've done a lot of M&A over the last three years and so you would expect it to be.

Speaker Change: Can you maybe give an indication of.

Speaker Change: Net or the.

A little higher than normal, which is what you've seen and you and your and it gets called out because we've been in a flat to almost.

Speaker Change: Shedding impact that's reasonable to expect going forward in like shedding going to continue.

Speaker Change: Similar rate to what we've seen.

Speaker Change: Less than 1% type growth market historically, when we've been in a stronger GDP market.

Speaker Change: Well.

Speaker Change: Number one yes.

Speaker Change: The M&A that we report is is a gross dollar of run rate acquired revenue achieved you are correct. We give it in each period, what its contribution is in the in the quarters and the year on an actual basis.

Where there is real underlying nongovernment growth of 2% to 3%.

Speaker Change: It's not called out because you are still having flat to positive volumes. So thats really is more of a.

Speaker Change: Whats going on in the macro economy than anything.

Speaker Change: The shedding is is a function of underwater or contracts that we elect not to renew based on either.

Speaker Change: So we have we've anniversaried a lot of the larger things that we have shed, but don't continue to be shedding.

Speaker Change: I would expect it to come down as we go forward.

Speaker Change: The service and safety concerns or our financial return concerns and obviously.

Speaker Change: But it will still be there, but this is just really more a function of what's going on in the macro economy.

<unk> done a lot of M&A over the last three years and so you would expect it to be.

Speaker Change: Thank you very much.

Speaker Change: A little higher than normal, which is what you've seen and you and your and it gets called out because we've been in a a flat almost.

Speaker Change: Thank you and the next question comes from Brian Butler with Stifel.

Hi, Good morning, Thanks for squeezing me in here I will try to be quick I think most of my questions have been.

Speaker Change: Less than 1% type growth market historically, when we've been in a stronger GDP market.

Brian Butler: Already answered.

Brian Butler: One maybe on service intervals can you maybe just give us some additional color on just kind of the service interval trend you saw in the third quarter and maybe year to date and how that might play out as we get into the fourth in the 2025.

Speaker Change: Where there is real underlying nongovernment growth of 2% to 3%.

Speaker Change: It's not called out because you are still having a flat to positive volumes such willingness more of.

Speaker Change: Yeah, Brian I would tell you that on a small container basis in our competitive markets that continues to improve.

Speaker Change: Whats going on in the macro economy than anything.

Speaker Change: So we have we've anniversaried a lot of the larger things that we have shed, but don't continue to be shedding Ah I would expect it to come down as we go forward, but it'll still be there, but this is just really more a function of what's going on in the macro economy.

Speaker Change: Typically when you check out service decreases that are really affiliated with price change. So you got to look at what is happening in service decreases that are solely related to economic.

Speaker Change: Versus are you decreasing the level of service our frequency because someone's trying to reduce somewhat the impact of their price increase. So those are two ways of looking at it and they are very different and I think on the economic piece and the price piece actually both of those continue to improve.

Speaker Change: Thank you very much.

Speaker Change: Thank you and the next question comes from Brian Butler with Stifel.

Brian Butler: Hi, Good morning, Thanks for squeezing me in here I'll try to be quick I think most of my questions have been already answered.

Brian Butler: One maybe on service intervals can you maybe just give some additional color on just kind of the service interval trend you saw in the third quarter and maybe year to date.

Speaker Change: From where they were so we would tell you that that is.

Speaker Change: Less of a headwind than each of the previous four to five quarters.

Brian Butler: And how that might play out as we get into the fourth in the 2025.

Speaker Change: Okay, great. Thanks, that's all I had.

Speaker Change: Yeah, you know, Brian I would tell you that on a small container basis in our competitive markets that continues to improve.

Speaker Change: Thank you and the next question comes from Tobey Sommer of Truth Securities.

Speaker Change: Hey, Good morning. This is Jasper bibb on for Tobey I just wanted to follow up on a prior question. How are you thinking about the core margin drivers in 2025 underlying.

Speaker Change: Particularly when you check out service decreases that are really affiliated with price change. So you got to look at what is happening in service decreases that are solely related to economic.

Speaker Change: Underlying or EBITDA growth expectation I think the last youre seeing pretty good price cost spread and you also mentioned the ongoing decline in employee turnover you see kind of those key margin drivers changing at all as we turn the calendar and it's one thing for us.

Speaker Change: Versus are you decreasing the level of service our frequency because someone's trying to reduce somewhat the impact of their price increase. So those are two ways of looking at it and they're very different and I think on the economic piece and the price piece actually both of those continue to improve from where they were so.

Speaker Change #100: No we really don't.

Speaker Change #101: Basically when we give the preliminary thoughts when we say we should be positioned for above average underlying solid waste margin expansion. It suggests there's reasons you described that we'll be looking forward to having price led organic growth and we should continue to see some of those benefits from improving retention.

Speaker Change: We would tell you that that is.

Speaker Change: Less of a headwind than each of the previous four to five quarters.

Speaker Change: Okay, great. Thanks, that's all I had.

Speaker Change #100: And safety metric.

Speaker Change: Thank you and the next question comes from Tobey Sommer through Securities.

Speaker Change #100: <unk> term and so we believe that would impact 'twenty five and that's the kind of color around being able to provide more of in February when we give our guidance.

Speaker Change: Hey, Good morning. This is Jasper bibb on for Tobey just wanted to follow up on the prior question. How are you thinking about the core margin drivers in 2025 underlying or EBITDA growth expectation I think the last youre seeing pretty good price cost spread you also mentioned the ongoing decline in employee turnover.

Speaker Change #100: Understood.

Speaker Change #102: And then maybe following up on railways, historically, I think northeast who've been your lowest margin geography.

Speaker Change #103: Do you see an opportunity to kind of more materially change that margin profile for the northeast region over the next couple of years with New York ramping up and also your rail development.

Speaker Change: You see kind of those key margin drivers changing at all as we turn the calendar into 'twenty five.

Speaker Change #104: Well certainly as Ron described we think Theres a lot of opportunity within the New York market, specifically in the benefits of the franchise model, providing greater efficiencies and densities locally one observation about the northeast in general would be the disposal costs, the transfer and disposal cost which influences total.

Speaker Change: No we really don't.

Speaker Change: Basically when we give the preliminary thoughts when we say we should be positioned for above average.

Speaker Change: Underlying solid waste margin expansion. It suggests there's reasons you described that we'll be looking forward to having price led organic growth and we should continue to see some of those benefits channel improving retention and safety metric over the longer term and so we believe that would impact 'twenty five and that's the kind of color around being able to provide.

Speaker Change #104: Margins in in any in any market, but that at a higher level is why you see slightly different dynamics in the northeast than you do say in our central region or other regions, where the dynamics are different.

Speaker Change: More of in February when we give our guidance.

Got it thanks for taking the questions.

Speaker Change: Thanks understood.

Speaker Change #105: Thank you.

Speaker Change: And then maybe following up on railways historically, I think northeast had been your lowest margin geography.

Speaker Change #106: That does conclude our Q&A session. So I'd like to kind of Florida, Ron <unk> for any closing comments.

Speaker Change #107: Okay. Thank you 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 boxer available today to answer any direct questions that we did not cover that we're allowed to answer under regulation FD regulation G and applicable securities laws in Canada. Thank you again.

Speaker Change: Do you see an opportunity to kind of more materially change that margin profile for the northeast region over the next couple of years with New York ramping up and also your real development.

Speaker Change: Well certainly as Ron described we think Theres a lot of opportunity within the New York market, specifically in the benefits of the franchise model, providing greater efficiencies and densities locally one observation about the northeast in general would be the disposal costs, the transfer and disposal cost which influences total.

Speaker Change #107: We look forward to connecting with you at upcoming Investor conferences or on our next earnings call.

Speaker Change #108: Thank you. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect your lines.

Speaker Change: Margins in in any in any market, but that at a higher level is why you see slightly different dynamics in the northeast than you do say in our central region or other regions, where the dynamics are different.

Speaker Change: Got it thanks for taking the questions.

Speaker Change: Thank you.

Speaker Change: That does conclude the Q&A session. So I'd like to kind of Florida, Ron referrals that frankly doesn't Cox.

Ronald Jamie: Okay. Thank you 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 boxer available today to answer any direct questions that we did not cover that we're allowed to answer under regulation FD regulation G and the applicable securities laws in Canada. Thank you again.

Speaker Change: We look forward to connecting with you at upcoming Investor conferences or on our next earnings call.

Speaker Change: Thank you. The conference has now concluded. Thank you for attending today's presentation, you may now to centralize.

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Yeah.

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