Waste Connections (WCN) 14 Feb 242023 Q4 Earnings call transcript

Good morning, everyone, and welcome to the Waste Connections, Inc. Q4 2023 Earnings Conference Call. [Operator Instructions] Please also note today's event is being recorded. At this time, I'd like to turn the floor over to Ron Mittelstaedt, President and CEO. Sir, please go ahead.

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

basis year and As noted for trends. driven solid execution XXX Waste improvement release, QX in capped margin expansion adjusted Connections, in in EBITDA off continued operating our of earnings points a remarkable by

X, X.X% to USDXXX with Acquisition core of of commodity-driven as million closed by ENERGY ongoing. assets was bringing accelerated waste bolstered quarter, revenue in approximately incremental led Solid the the revenue dialogue organic in year-end, improvements February pricing revenues SECURE expected providing from by contribution $XXX growth waste, which XXXX acquisition Western million acquisitions E&P into announced we disposal-oriented Canada, of momentum has activity the during as for XXXX. also

expansion. safety trends, XX.X% margin for multiyear and continued improvement disciplined XXXX, the and turnover organic for commodity in values quality or the EBITDA overcoming Looking XX and with along lows, both of double-digit recovered in in from our flow billion Both at an setting after our headwinds basis focus acquisition year with price-led growth basis opportunity of the adjusted employee expansion during differentiated revenue revenue, Along revenue growth points full to on from exited cash adjusted we margin XX and solid XXXX line execution results rates $X.XXX margin drove adjusted EBITDA waste XX.X%, of industry-leading points in outside XXXX outsized up report of free outlook. delivered incident with contribution. at

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

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

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

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

we Connections a both privilege renewed leadership dedication was philosophy demonstrated in way have we excuse Waste of industry-leading didn't to was to our our remarkable -- ways, commitment Thank changes. serve. the some were me, and of to their who many culture, however, that served recognized we accountability the year, Anne. which you, results. local change, and communities unanticipated differentiate a remarkable the to customers Mary operating commitment decentralized and Similarly, have teams XXXX and What servant and drive there consistently

operating of throughout XX.X%, expanded our an As adjusted extremely with pleased year financial with and EBITDA year-over-year. the are expansion performance half XXX the second of we XXXX, to we when by QX average most indicated, of margins basis have strong margin momentum notably in points driven

to of of reduction margin safety-related XXXX, year momentum points incident During over incidents our XXXX. We operating in QX showing this we all in XX%, for by QX, with and improvement adjusted XX by achieved improved XXXX. retention employee over a safety expanded open importantly, during XX% delivered also margins into over improvement of occurred with XX%. XX.X% or rates pricing zero a EBITDA of X.X% and the year. positions providing of full report in Most core X% basis locations, Virtually reduction of over the

Excluding by revenue safety. improving quality as on basis trends basis and from points margins lower retention XX cost year, the commodity values margin the reflecting in of impact pressures XXX underlying and drag abating the during points our focus expanded as well

to contributed accelerating margin which of XXXX. second in All half expansion the of the

increased Looking in ahead, continued the free up impacts margin to risk adjusted outlook XX% cash landfill of in site-specific Chiquita $X.XXX provided flow unanticipated at and cost California. of turnover moderating overcoming free from in reduced benefits more Southern related our with closure We Canyon over unrealized converting adjusted set cash of flow, along we and 'XX, in than outsized billion delivered XXXX improving EBITDA with is adjusted line for expansion August cost inflation. the

elevated Chiquita event Canyon our or our that October, ETLF Regarding are in on at earnings call have we progress. by last landfill described encouraged we the temperature ongoing

the reaction stakeholders in our landfill, underground portion closed generation. of as community the a the occurring leachate including We the associated ongoing continue to work we manage other with from impacts and

be we mitigate As site-specific and provided QX nature. impacts, of to to post-closure indicated increase address and case in liabilities the disclosure $XXX closure ETLF the and additional we an in landfill our in recorded November, which would the million approximately nonrecurring in are

million. be slightly later engineering and on projected Anne is outlook the to our costs, in describe. with peak $XX line, for more During included Which time estimates generation outlays in leachate adjusted related due will this the fully Mary $XX expected of for Based cash XXXX rates timing year, million as the below our free XXXX, are estimates we the flow current expectation approximately to incurred for outlays. to approximately

Looking tuck-ins franchises next markets, entries at number closed market million including In XXXX, activity we integrated from acquisitions. competitive over revenue existing our with $XXX of acquisitions markets, a operations. new XX and of to annualized footprint in across and

previously ENERGY's over outsized in $XXX this top expected core set already E&P solid XXXX contribution of year ensuing a acquisition SECURE, waste rollover up business. Together for an X, robust million, during waste SECURE of solid with Stay is February on we quarters. divestitures our with Western deals completed of for in closed up sets M&A contribution 'XX, in pipeline tuned the the acquisition opportunities Additionally, Canada. announced few the asset XXXX coming disposal next oriented of waste from quarters. On

York QX. Additionally, with the forward service. we to we been beginning are year, encouraged XX right compete project by zones seeing awarded in recent commercial plus in movement City, this progress in slated a for look We pilot where continued process compactor the to have New franchise citywide

sheet acquisitions greater no access change to of valuations to while with has balance noted, there elevated focus over approach many risk return the flexibility increasing our and and activity in recent energy and us. strength the levels organic created to leverage That debt-to-EBITDA, our story, flow is $X.X optionality markets potentially including acquisitions, our market of with cash in billion, Arrowhead profiles for acquisitions to for and said, our also Northeast, acquisition we've in investments projects we shareholders. our to capital of expanded we landfill market be disposal liquidity solid profile the As rail provide continuing appropriate. Ending growth selection, along waste disciplined in determined our solid XXXX waste for X.Xx of Alabama, approximately addressable accept free renewable and on the for

To during invested business through acquisitions to dividends. expenditures million we and we end our share over to $XXX billion in position to reinvest return by future And $X.X that and for increased approximately our shareholders in dividend XX.X% ourselves quarterly per XXXX, growth. capital

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

and X.X% up Thank year-over-year. material contributed million with of our Western line you, in in Ron. million mostly or or bringing revenue XXXX million negative Core was Year-over-year of year $XX QX in were since about QX to markets. $XXX ago region X.X% XX net Fuel acquisition in XX.X% contribution $XX In period divestitures, net over revenues and bringing year X% on full competitive from fuel year the was and of XX% billion $X.XXX million. fourth up Acquisitions completed about billion, $XXX market about quarter, $X.XXX exclusive our revenue to in points between pricing lower to in basis our X.X%, about and range quarter surcharges the costs. full expectations

to in markets. nonrenewal price municipal shedding of down continue X.X%, in between were and volume volumes and reflect purposeful as of and well revenues our waste as some the Solid poor-quality QX contracts a trade-off

prior temporary they of to diversions completing our repairs. diversion the at end Seabreeze Those comparison operating in Texas, in where while the we hurricane-related waste tough limitations the and Additionally, of impose year's in reflect landfill activity from January. QX, certain Florida, concluded

on volumes, and XX.X% tons was million primarily year-over-year a flat QX, Roll-off $X from Adjusting those EBITDA nominally million X%, special C&D Looking due an in as about same-store release, with year-over-year about up waste in for year's and revenue, were included or flat, diversion total repairs as weight total MSW at impact our year-over-year. Adjusted impacts the noted. up $XXX quarter reconciled of to pulls Seabreeze, X%, basis. at tons noted and XX.X% earlier. hurricane-related about the in up fourth day landfill Seabreeze X% were for and of down were last results down to per waste earnings

impact, waste point XXX basis XX points margin basis margin solid EBITDA underlying from our primarily this Excluding expansion. was year-over-year, adjusted up

impacts outlays year ETLF the totaling increase in as billion saw the a $XX XX% liabilities our of our 'XX fleet Therefore, and EBITDA, for to conversion those for and to ETLF to no the adjusted results outlays, was of reflect there reflect similar or free our of expenditures to flow incremental adjustment flow during As free Canyon of impacts adjusted adjusted reflects at Chiquita adjusted slipping for to $XXX capital XXXX $XXX expectations to with spite In purchases EBITDA. Capital year. line reflects cash million our prior of in of revenue million. amount we and $X.XXX XX.X% address over the the of was XXXX primarily an impact QX Ron projected our while approximately closure operating address outlays noted outlays XXXX. expected site-specific earlier, cash million post-closure

with development. Additionally, associated include or RNG about they facilities $XX million under natural renewable gas

discussed outlays prior structures, our by XXXX of or on of to RNG with about for facilities, our an sustainability-related include I per million a aggregate which strategic outlays generate will incremental factored The of has expected XXXX $XXX As million now calls, EBITDA through million, outlook for XXXX RNG up step of estimated our capital are approximately ownership XXXX investments approximately dollar projects QX about with $XXX variety EBITDA of which XXXX. dozen along outlook $XXX CapEx. $X been in to into projects review a

the Securities like vary safe authorities on to with uncertainties results remind actual may Canada. these harbor and encourage to again carefully. everyone statement review Before we'd our we've investors the I similar risks that SEC regulatory once factors We in and or in based made Commissions filings outlined and significantly do,

no assumes period. and expensing of outlook acquisitions of change from remainder additional impact may Our environment. current the excludes during transaction-related also items economic It the that in close year the during the any

Looking to first $X.XX XXXX. at is over the XXXX Revenue X% billion. in full increase by year to estimated

during online plus as driven closed approximately expected revenues line X.X%, estimated year-over-year. with For RNG margin commodity-driven we at core release, pricing recent X% is to in X% to revenue EBITDA XXXX. Adjusted of by on of volume up billion and in XX.X%, expect price About million to pricing is facilities $X.XX of in solid contribution $XXX levels, points XXXX, from from date of values expect adjusted reconciled EBITDA earnings waste, in plus X%. or our come XXX nominal approximately X.X% acquisitions of basis reflect about XXXX to

per effective about provide diluted in in increases amortization values be Continued taxes. Interest XXXX share recovered and in in CapEx is upside release, in approximately $X.XX $X million with XX.X% inflationary project for rate development. or or range for in commodities on our would XXXX estimated approximately flow our year of quarter-to-quarter free some about waste of XX% $X.X XXXX the in acquisitions outlook. during at expected XX.X% expected E&P of moderation RNG closed $XXX million additional Adjusted in is billion, our activity billion to $X.XX CapEx cash or is the net expense intangibles the billion trends, variability. $XXX estimated XXXX revenue XXXX for of expense earnings reconciled at of of including approximately amortization Depreciation including and to tax as $XXX million, base to plus of is

XXXX. closure bill RNG level billion in for Ron on is noted expectations for our tax for will and of the and by for free would million. Incremental outlays conversion with earlier, underlying RNG additive. free have $X.XXX for to we Canyon under are the adjusted outlook our reflects of into Chiquita be ETLF. EBITDA including bonus our in anticipate consideration RNG prospective cash outlays or $XXX to Chiquita therefore, consistent a be As facilities, reflects the provided. would, growth Normalizing When XXXX also the additive of approximately retroactive credits not million associated trends Similarly, outlook longer-term outlook cash adjusted facilities factored line with and Chiquita flow This we both basis, depreciation of a benefits with outlays $XX flow any decline restoration tax XX%. currently for and

associated up X.X%, to revenue, first or expected pricing Turning about interest expense million. Depreciation quarter amortization share volume or estimated including QX XXX net losses and outlook intangibles Adjusted driven the is in per amortization $X.XX for of of XXXX. to revenue many estimated of Interest Coast. remarks volume income is $XXX be billion let back the taxes. QX Revenue points of across of XX%. be estimated at is temporary to of of the Volume for weather-driven during XX.X% price approximately January to is turn million Q&A. for about diluted the call estimated at about over tax net Ron about XX.X% approximately the with solid me $XX approximately basis $XX by expense incremental quarter to $X.XX reflect in million waste about for particularly And final and before rate the now first plus some on in widespread closures of West is now year-over-year markets, QX be X% EBITDA to QX growth expectations X%. our on in about estimated

on doubled decentralized us EBITDA but the apart. At of commitment both XXXX. Thank way capital relationships to differentiated renewal as for strategy our the we human XX model additional the Waste was recovered you, well our in enduring that inflationary to culture. our not our Connections. to our creation servant has make the any EBITDA exceeding commodity record well who importance basics reinforce target Anne. continued every outsized the track by with renewed Mary widely. XXXX With return us XXX towards and we've values implementing pleased are of for years. Moreover, extremely necessarily from well a both applaud who I operating basis embody are value to fundamental improvement recognize that work XX,XXX company. of local results. to back routes down by our XXXX along our leadership-driven of near-term a to We're entered with driven discussed day. the teams employees that better interrelated. on We a a positioned and values as results year thanking for XXXX and to they believe supported proud growth, the positioning exemplary expansion with expected our tirelessly set outsized a We're conclude pressures adjusted we are has along continued operating by With the or want only of XX% achievable, We We're sustaining as Waste minimum, growth momentum of model, points leadership they Connections, and for activity. results margin upside in getting

part In RXXX who team were approximately addition, our ENERGY. welcome with employees SECURE XXX who now the Canada I'd are of like to officially previously

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

we'll from [Operator and question question-and-answer time, that gentlemen, Brown Our this from Raymond James. today at session. begin first Ladies Tyler Instructions] comes

Margins QX. those through the here, Maybe the both as for quite pieces in improvement some XXXX point strong. just walk for QX you improvement and are? expected if outlook hoping could the are basis of maybe I through what was of well? key XXX Just kind walk us

Sure. Happy do. to

solid was there So about in with waste M&A. of in way nominal business. small a QX it primarily from be would the about RINs underlying to prepared balance XX% is then as and remarks, and was and the I offset said then recycled the E&P improvement hierarchy contribution The commodities think the a from

then we for And QX. full year, that's that opportunity outsized So expansion. the said, three are margin drive at factors would there looking as the

underlying and one for business first spread retention. being and the price opportunity the cost The outsized improving

And XXX be acquisitions benefit would by other accretive the the underlying expansion the so addition then And the about the with would business. of pieces basis SECURE. of margin of be point half driven two

tailwind, but XX you be the if other and basis term to the commodities points, acquisitions, XX say, mildly XX which RINs, have of, cycle impact SECURE points. think the order diluted that and basis balance smallest including and which the in to then being So piece, the would XX

update on and Okay. turnover safety. And then appreciate Ron, I the

months for turnover that, It safety to you improvement clear show remunerates in a the the margins? that it last in of I few think to in just 'XX, is not. or that kind want expectation that core margins. up the Because be yes. I if So said like, in assuming you sounds and are takes that quarter,

Yes.

them separate little to Tyler. bit, a got we've So

say to So points the cost is There to some come basis I certainly, cetera. talked is point at would out on see of the we've starting et effect cost seeing impacting structure. reductions. a about cost we're And the variable, and of see in benefit operating, we're favorably of XXX that risk other labor, this areas starting lag our turnover costs our impacting structure, the from

is 'XX. not So that actually factored into

as continue 'XX risk 'XX 'XX that will we not into benefit come in is but through as get the to So reductions, we have we that guidance.

in the risk seeing margin improvement the tables of that So at point. without is this benefit this actuarial

Excellent.

very moving around there know clear. That cash free very And lot you in that That did million is Okay. Anne, helpful. in then say $XX a Mary 'XX, I spent is on RNG. flow. is that you

So the $XXX and RNG your to million maybe to that if then imply drop spend I add in will something that next 'XX. year maybe to million $XX that would like zero

And That's I between $XXX and million the down why right, made steps the down. yes. RNG that's point where pieces the the steps Chiquita reduction two

last my then one And here. Okay.

EBITDA how So any does it XX%, you benefit But to there's then, like be margins, from that clear, talk look RNG schedule that 'XX. Ron, And when is will sounds in contribution just a include sorry, 'XX. about that XX% and nominal in from 'XX RNG?

Okay.

So let's part first. tackle question the your first of

'XX. $XXX that of in nominal as A 'XX would of of million RNG. full very million contribution, noted, achieve EBITDA we 'XX, $XX million in RNG. on Let's investment CapEx start for outlayed that amount for with year only you've We we said $XXX

with until is That's of number Use the million you'll start spend bulk so some doesn't amount in of to EBITDA -- that the But in $XX of million, 'XX. more that in or and will 'XX. is that end That of amount the full some quarter ramp 'XX. the the nominal 'XX, contribute third come 'XX. a contribution. why amount why largest a of in the online CapEx obviously, 'XX, in will So will $XX for see

like X also they the up. across and And things going they generators, utilities later, a cautious X, be et transformers, backed These for guiding have build you board, RNG extremely X about commitment that are need. we're still of projects. issues in you hookup. as chain months are cetera, to give in supply to We There to a talking these somewhat are seeing are headroom local us still

a to in have you So build there. little headroom

I the So feel million coming 'XX of by you or course, why in telling that's then, full comfortable contribution $XX 'XX, more 'XX. with amount so in in some

said say none in that's very in that ways why there, there long RNG the of them So get had multiple and contribution to little are way XX%. to a to it. RNG around bend no That's we've

Our next Kaplan question comes Toni from Morgan Stanley. from

in Pricing April, most to be by this and of moderating. have you'll quarter continue strong you'll lock it inflation cost and

we of like safety that and we each it end margins look year, the as that well, seeing. through at is I also year. by guess, at coming one down helped you'll better as benefits -- been also But look more through So sort turnover you've the of should the the probably see inflation basically,

So that? just I thoughts guess are what margins, of terms your of trajectory on in

Sure.

of raised, have lag and factors somewhere we'll half around quarter, given pretty points. expansion since little So the over full XXX you it, driving some you year. some in it different the basis just if in the get way QX year. you point for first of to about quarter, is margin the couple year, of think in a which the one of right will which because to of from and you savings way the for It's We've the think modeled some greater at little than it, those one. the more to XXX similar Toni, about a turnover, from obviously, of is less, later. a given commodities instance, for ability in XXX early We backloaded. be instance, for But further we've already realize to be give the tail benefits course might the it But you you each will

it of I over why the margin consistent expansion the think course year. that's so as And about

you've of turnover been about at think multiyear of at you trying last labor When think labor you Or the Perfect. conditions? guess it initiatives turnover I when doing is combination get you mentioned the place a benefiting to putting initiatives the just then two sustainability market you the you in or were and are rate And lows. about year the turnover level? that the and continuing, that from

Well, with start so let's Toni. bit Sure, cadence. of Yes. a little

we So experienced turnover forever. us of in a high was low coming 'XX, XXs, -- the total which out of for

and the dropped of year, improvement to number These to number about As about turnover we turnover you through XX%. I most second we've QX that the the fourth that quarter, as the 'XX, came came particularly number to up the that were sort labor we dropped part. market into and the would the through are about XX%. midyear, changes help of through and numbers the end and probably voluntary reduced was end the the XX%, the tell total of of quarter of half and made of the year, third programs the incremental

I call sort it would XX-XX. of So

as from drive to say, doing. XX% from XXX% we a what are through driven or number and year be below this as to, plan we go by 'XX sit now, we here down we that XX% Now will from

We've significant We've significant There's we recruit. made how in in made of changes to in of we litany the development. year sort made made first a whole we have an improve voluntary experience turnover. have employee, supervisor onboard. significant we so changes how changes And changes that of

best fit, about always means the want are voluntary be who to XX% to regard might XX% being we not to to are in going on proactive turnover. particularly with safety. have people We That

that But that some you get achieving down very we number, still have in number. feel to And We've XX% So do. XX%, work we definitely, to that telling over voluntary next will confident get to turnover It's so. been XX%. year to XX% there to the before. or

comes from Jerry Our from next Revich Sachs. question Goldman

just XX.X% averages, is on XQ. it's know just in based versus normal I mentioned. QX QX? sequentially. help the XXX off was points to historical sequentially, down recent This one takes versus seasonality we look us today. Adam seasonality points basis item margin weather believe of QX for at guidance margins puts normal and I Jerry X If usually basis understand around Can you translates

the factors comparability start. And keep quarters. I that idiosyncratic just are always across opposed that's reported. we've this mind say to also, I'd as drive is where There guidance in what would

a always get what And said, little quarter. are. volumes factor, in drivers so it's weather But contributing as to specific to negative it's we you the a granular outsized tell the to difficult is more

drive that's that I so there. just start would one difference. would that And And consideration

the Okay. we Great. M&A could what's the is how opportunity set about And to allocation in a the a dive And I think was just Northeast from little wondering if good specifically? pipeline into to year? this in here, active potential way further M&A

top Well, Adam, what's And outsized already that's million on you an completed have of A our top have SECURE, guidelines. of on done finance historical specifics We've can and that. revenue. year any meets said done assume we pipeline. million $XXX $XXX comment sort in financial M&A. an We or to for that, that strategic and strong year not on anything $XXX we is allocation of of an to our never acquired or don't in that's our on provide unlimited million. capacity And my I comments, M&A

in would $XXX on of do comfortably million sort that million it implies of SECURE. top acquired we So revenue $XXX minimally to

what your be in mind on based would -- figure et there from valuations, I you historical what allocation an cetera. So can out that think

Our next question comes from from Noah Oppenheimer. Kaye

the commercial home strikes the On zoning I'm zone. for York literally me first New since in pilot

how So as Northeast. in acquisition opportunity seems market the detail during a opportunity? if of through Take you in through move you I on expand could that addressable moving us plus prepared that those little increase more that, remarks addressable your around and bit. be wonder expanding your I commented you pieces both to just think rail the

and one, sort City. Well, certainty of and footprint model business an around what the uncertain projectability decades. New it mean, for York had sustainability and has City franchise in opportunity Which I provides of is provides a things. of the New number York competitive number

been really market it. quiet have of financial if this metrics whether and changes for operating through came we see So for platform successful and to the in to it waiting achieving us, more and where it were that see waiting we

one. constrained, number acquisition-wise both So growth in think produces the it is around I area, Northeast there's and that Two, organically now the everyone knows. opportunities in market as disposal capacity and clarity, the

some New capacity We assets, are effectively Seaboard. Eastern up great and assets along at and those disposal assets. in many we of in York the have But

that to for to our So Arrowhead we What new take acquisition we the going into facilities, and shipping waste third-party locations, us were volumes contract sites. allowed incremental us. and third internalize to parties. volumes also of It pricing volumes that pull were with attract us are it were us able volumes our not for to allowed out did in and is Northeast to the Northeastern

did that. It opened along at. looked also that otherwise So Eastern opportunities would up Seaboard the have it M&A not we

not a go to part urbanized and to model. more are our We market is in, integratable. something not that non That's particularly acquire prone of

So achieve this us that. allowed to

it's of currently things number us So for a forward-looking. and done

for credit possibly Great benefits sized Mary a terms is just meaning optionality. could guide then sharing? comfortable equipment. RNG, claim pure law, credits with the company? include companies do If on tax that not does any ITC that you Anne, benefit major is way said that allowing the something of treasury What you've from the color. in were tax finalize on consistent to incremental essentially to in what of that guidance And 'XX, pieces in to the and the is feel cash Is

as that expect. nominal. that about benefit projects our Sure. outright million Well, will in 'XX, a $XX of -- only in small you own Noah, It's the it's we'd fact, pretty given know, incremental we percentage are

full built the once it's portfolio on And out?

portfolio, whole I'm give yet. in a to that not position that Yes,

we'll actual and Just qualifying are at the the projects, equipment what's outlays what know. looking for

question Chiang from next Our from CIBC. comes Kevin

wasn't that deal. out -- I my capabilities. their understanding just necessarily came to Maybe the Competition these running SECURE on Tribunal. a is assets congratulations Tervita And closing on through SECURE Bureau on the this full know

provided can the might Just see? acquisition, So run is change your that these as revenue the ownership. And that achieving? revenue you'd you to is the SECURE achieve how under Or that you own wondering assets? upside you think guide you that related was any rate

of Kevin. couple Okay. pieces A there,

a operating time required at very to close. the they divested I XX So of first off, by there were and throttle, full would XX operator which operating were tribunal, good at be is facility. say had they assets of the the And optimized SECURE were

looking at incremental material have those not now. in not SECURE are the incremental we're but that period provided 'XX into of have make XX in we be what and that would XX. some There the could We're be facilities. perhaps right that, assumptions And over will we reopening for we beyond. anything XX, to a guided, facilities 'XX running certainly it 'XX of the And is in be That those that of okay? certainly 'XX. 'XX, time, So includes and we guidance but would those X

how available I what that's you and the beyond what guidance think think is of in that. So is should

after to differently opportunity a maybe the came bidding That's of in fewer pick create market helpful. -- that want or And then an just process? they wondered, in York maybe New they win bidders that M&A number are for there Obviously, on again short haulers the from just I at you zones might zones because up that any assets look winning maybe zones does that congratulations York. to New on here. up

Well, the but is I yes say, everything would it a situation. you is complex answer generally, said, to Kevin,

this to while that franchisees is remember franchise zone. a area, awarded three nonexclusive So are there each

overlapping zones. or an the is acquire that reducing someone first, the competitor of can on to if such comfort have determine certainly must the in city BIC, add and a zone. competitors Business it back other their Council's But acquire zones within zone. And get third could -- they what then you have a you You was approval and potentially

a There So how many are number right of complexities. one there now. are caps zones own on can also

their decide to goes it. trade divest do they or that level have or have if another cap they to comfort beyond then zone someone So

it But optionality our say in I opportunities would a M&A complex situation. improves it's the city. So and generally,

Bryan next Our Burgmeier Citi. comes from from question

I think the just about on X%, talked still of expansion the maybe wondering last kind wage X.X%. rate for X%, maybe see XQ. changes there look to numbers? can call, 'XX I'm kind just strong you being of of growth kind that and any are view cognizant wage X.X% in Is ongoing good in be on of did those I'm what portfolio exit growth like versus you that your 'XX. margin inflation, some that moderating

Sure.

exit wage the point moderation from So in of talked X%, that it to your to get XXXX QX, think, the of in you're one the a of right, I which with about we year coming we questions level. of respect to growth, did saw starting what into X% about to about is that

moderation nonrepeating margin we we further cost the as moderation. one of about think about about the moderation solid year's level So of being underlying move or expansion, as talk and waste drivers continued we last of outsized year. the through increases as we And think increases, would

saw about down think of X% we maybe X% XXXX, X% the flows. it, -- I slowing to rate So

X% probably to cost it's realistic pressures maybe as sub-X move wages. That's year. X% or the specifically we moderating, think of through about so those some And to a way

at smaller size can And of Got help think E&P dilutive some New there's about talked maybe slightly with then is M&A just to it. to mindful beginning. maybe from the a revenue in to just if in mid-quarter. especially impact as I know positive sure the closed the XQ? that it. margins I'm slight And Got you seasonality new this deal business? City of. a you be item Arrowhead you kind flips York 'XX, being Do not

Sure.

some about respect think acquisitions QX and about head $XX in So you QX, think even in business. contribution into the from how to for with as about and million should to QX seasonality that, we the E&P

through is have million it. acquisitions anniversary timing QX different it's online. we I there. would underlying as down as But the the business, some and just So dropping coming then But $XX what little overall toward way so from a year the of a a for good end the we move to the bit think about little ramping year drives

you initially continue rail those will as our 'XX, Arrowhead, volumes And of amount dilutive move model are as Arrowhead to accretive margins. to regard ramp of It with as component nominally that are the I then disproportionate would the margins And to because correct, there. we to tell transportation be volumes midyear by you that throughout of was in internal volumes.

-- So of of relative the coming intercompany an margin elimination, assets. volumes party, you third the which have profile margin dilutes which raises the asset an the profile elimination to

the important So there's there on margin. that semantics are

comes Wells next Fargo. John from Our Mazzoni from question

me, Congratulations in you've projects terms peers your talk it way, backdrop could a what ask -- commentary? there expecting in and now, changes -- of more equity private within how as on you excuse of sustainability $X the kind different do exiting the frame of mark strong with in 'XX, 'XX, the to balance on is into kind from M&A the competitive exiting 'XX. seen results. Maybe of trillion what kind focusing I some markets that about has say, you're kind trillion. like, or sponsors, competitive the more of, kind we of think dry been any kind backdrop uptake as powder And But of well

John, thanks. Okay.

a I that you there to try several question I'll our answer asked best think complex that's it. was parts.

So what core first always off, do look, and has is quite been. to sustainability we honestly,

million we'll RNG I investment. $XXX We moderated we've have fully consider in a you've online and initial taken in would projects do bring a EBITDA XX approach, our balanced as $XXX for And seen, as And for said what specific 'XX. approach that's by that to million sustainability. a we'll

time. number about plan not do okay, we beyond have to nor projects some talked We that, and of yet that one, for we period have

not betting aspect entirety strategy strategy. of our the growth of on and It is one We our our are okay? sustainability, future

you're an M&A amounts 'XX see We and on throughout waste to that standpoint. ample do differential reasons, sustainability. going focused to have beyond. organic of solid and and an from have various Others in 'XX because business And continue happen to the core

the Some an much as M&A size to of that in HSR requirements. and inability do current

great opportunity are in us And strategies for a way. their window well. as So there's that excellent those of for companies

little different bit in a are We niche profile.

look, right because has active private maybe equity, do. to than this there's been now always equity in a space. As in so there deals private are just dollars far little more more as Yes, private equity

So that yields more involvement.

urban and be heads focused consolidate they do which M&A equity private model. that often our large amounts honest, it, to short we time XX% to only with their are revenue flip We're But equity private very in on platform. able not urban. periods Most of because is of but in fits America

a and rural of time in lot suburban a the deals $X of time, that we're can that's of not market at America, $X revenue. strategy consolidate million you to XX% So million a

was to So we're exits have by as platforms. equity. private we Arrowhead look a theirs we impacted too were take not also and Ultimately, a platform, there. private the equity such opportunity those negatively at successful

doing as not we'll equity done, but able for competed We've their private then against They'll seeing always ours get excuse be get continue so. and get or okay? using we'll and share, an not are to successful being deals them, to we So some.

if were clarify the So question, But I core of at. you maybe I it that's address what for believe hinting your me. you could didn't

kind what exit the and the should and And anything of 'XX model And That's help looking you takes exactly what EBITDA into year quick rate? be we and to that cognizant you we as for. of puts of color. XX% just Could us could of seems the a were looking than Great of segue expected. we to like there? sooner It the are kind frame margin maybe back target. the kind come half

John, Anne more just Mary a and details. I'll comment take provide then that, on I'll have

the our just expect. margin reported best we granted of Look, the which EBITDA seasonal we XX take of swallowed we basis year, if is But that the and headwinds you look almost points at didn't quarter QX, that XX.X% XX.X% did. we

margin heard XXX basis Anne You of balanced the relatively say on Mary points improvement.

that Let's XX.X% now it's in just say 'XX. QX above Well, QX. of or you're for XXX at

where are. So achieving It's of that's 'XX. quarters we what gives throughout in ramp math on us the XX% confidence we into our as 'XX in some

I'll that, let comment. with Mary So Anne

look we're XX.X%. at we it, the just margin 'XX. expansion behind guess, Sure. math point, delivered you if guiding It points, the I says that just the there since basis to XXX we're fact other halfway in

But get it ways at look you to are in expansion of margin various what's and the through And an if opportunities. as there outsized you so and Ron gives just possible. business, underlying a there 'XX the sense ran example,

feel just now the the we then that. to prior becomes to It question not an was positioned it well of so back endpoint. And do much, And meant peak of margins. never be XX%. even illustrative ability north just get to so It to is was

Our next Stifel. Michael question comes Hoffman from from

We've minute and correspondingly, direct sort been below can like You'd in its fleet, and correct? and Am you operations I back of way to of think that. trucks. talk your the we 'XX maintenance XX% through So repair What that about to how routed a get your is do works for fleet. buy outcome cost?

Yes.

XX%, first a We've first around. So at another maybe 'XX you one gotten think is about your and delivered. -- Michael, fleet percentage 'XX hair been way our or approximately, off, comment in around we accurate. is if I've I Look, of look below

number okay? 'XX. push told that, in running still maybe to will we're be there So X% fleet but a closer XX%. to 'XX being bit being We from are We're X that told be should little that 'XX XX compress should X%, some short, in about to then that,

And being then that So in we're improvement. see normalizes 'XX. you it told

by fleet believe we replacement. So on with the we'll normal 'XX, be back track

the it's guidance is is the most one As to it's the it's far a numbers. fleet when and new equipment. delivering honestly, as at time the you your turnover of doing you're highest maintenance the in drivers want look, Quite damage good in the not news accelerated key don't side, XX%. And and to

not we to it's employees. going so got quite just down in in bring maintenance turnover the of because before show on wanted focused when up replacement we many sort dramatically -- any movement So you've upwards fleet to new we're

it of -- about go a improve 'XX. blessing, honest. And the we somewhat good been into through as will be feel will So we 'XX the to has allocation how actually of timing fleet

capacity. your in the Where so that gears your Switching tons trend volume, look like? been big It a in you've Arrowhead. own what's to day alluded maximizing You utilization? redirecting we per Okay. pretty are comments, has

does, not or tons under a you, tell would everyone a was day I maybe handling so permit. acquired ton just day. Arrowhead, around what per X,XXX Michael, you has know, Arrowhead we When XX,XXX Well, as it

at already. that improved 'XX will think term These some 'XX. time. XX% have is We or it exit take 'XX by And I where into believe more we longer doubling originally. things was I

I what think it originally we acquired approaching triple you'll us at. see

given And on dependent in as then Canadian think SECURE the you're all production correctly, that Okay. the And business, you even the COVID, go if production. down didn't about disruption. low I remember

in? Help comfortable is sensitivity stable. So everybody really this the what's shut get that to

Yes.

said, the just Canadian business reiterate, is mean, market our about Again, U.S. you very to the different RXXX U.S. the drilling as E&P XX% is Michael, I So than oriented.

do So it of price. crude they highly do fracking. market and not lot count rig to sensitive The because a Canadian is is inverted really

their would of oriented. over $XX. be XX% a about crude that period during market is moved a So $XX move barrel a Western we from a around diligence to X-year the Canadian high XX% And production assets look We back acquiring. -- crude to

changed and that's peak X% pretty peak XX% revenue trough. swing to trough EBITDA significant a So changed and to

more the that it about honestly, shows difference brought our and So it a we is of the portfolio to assets production-oriented model. I quite think derisked balance. combined significant a things XX-XX loved one And between and model the that's a drilling-oriented

have Got their program. is rolling it. beneficiaries out EPR award? of Were specifically one contract the which Canada, business nice And of an in a Ontario, you you then

you. we to And with were was intentional, honest -- No. that be quite

opportunities are us nice platform. a for We nice Canada first So let is opportunities off, say whose business in There think the providers EPR residential are opportunities. okay? this. predominantly

you filings, Canada. And what we we've purposely reflective and that's platform done. from and our shed disposal Canada in have can have are in our and in since and We of that commercial see the tapped margins is away much acquiring purposely, more most of residential progressive segment business company of a reflective,

If relative at to are you almost our our double. margins look that peers,

our assets sense. assets, heavily X-year move of in MRF are short-term tends able very make business that a muni to asset to not contract contracts. Canada. have investments amount nominal a be business looking Canada. That are you those Those business. of you're capital, relatively in residential and a if not lot into type underutilized particularly add So to the That's we're platform And

of a asset we're So opportunity because think great it but not that mix. it's an it's -- pursuing really really I opportunity,

one Got Last it. for me.

your potentially around some credit. strategy with of comes is because RNG What incremental volatility risk? the So defeasing that

portfolio fundamental about you the for sure, who to and as variety know, fact we'll we of the doesn't projects approached in. ultimately X/X of and -- with the and structures ownership RNG we own Well, anyone just that's way we participate approach that the outright know, that Michael, the

one hedging We've there, is derisk that's RINs. the And it and those the other right opportunistically put we So element done in in place. hedges of past.

So how it we to we'll and the about it. that's that's fundamentally, derisk -- think way

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

ones here. Just wanted two hopefully quick

could How and economics here side, rail the -- rail you do that if Ron, of the you to especially to much you call you it think -- the were to number when you up, side, alluded scale can be the deal. total times fully numbers on utilized waste type won't did option scale but Or extent more a if do quite look appear move First, this on the this. you're you on up? is really what every of To are that surgical attractive tactical your way incremental this you for in nice the dial basis? you an think in on

little to got it I've So dissect a Walter. bit,

acquired, as take that landfill when to it has capacity mentioned the So first we earlier, I XX,XXX a day was X,XXX. taking off, tons

right? was mentioned if you we'll the it XX% that. I thought that And we double by So time exit I 'XX, will, utilized,

up utilized. that as XX% And through can 'XX it get would Xx and we where be that we So were. we 'XX, that then come to we think

incremental It's no and that cars XX% just utilized. track. loading in rail really on scenario, is So constraint and utilization. There

not issue. is the So that scalability

the moves needle the at the be before. moves in the said It look, that on the size is on basis can needle No. And it needle. we to areas that. But corpus, XXX own? market So we've be now moves going can of here what looked is integrate of M&A-wise because how its never never our something we growth our that points this that

it consider in it So a a I needle year Put a way, M&A or for at in more point while. that per mover. do growth

could. the of is compounding I that something. think And think it I

into reasons one here the fairly gave year. we the So I'd environment of bullish say that 'XX commentary sit that's on where -- and I for the that's as we're XX days M&A

that on color that opportunity. thoughts our gives on some hopefully, you So

There's I that's know negative volume I've question Mary had to but I of just And there to is apples talked and negative comparing some you not there, wanted my is on some through that's oranges just it. purposeful the for your that a in to volume an and in the course XXXX that. the think, persistent on about I inbounds -- volume an territory. I of I projection carrying volume. much perhaps negative compare apples-to-oranges really second for had for to forward really outlook Ron. that Yes, volume are completed your appreciate aspects, now know here peers, can and Two then XXXX company? flag that. is XXXX you you're I the on color, as on shedding is have you've and that elaborate this a And opposed before, XXXX which are second how projecting positive to great

Sure.

questions. to those address happy So

and companies of communicate both price coming different we recycling ours all, would believe, to and So waste RNG or additive, facilities differently volume I calculation. -- of point, first to think I volume people's your volumes is solid without that which incremental benefit other do the online, strictly be

the communicate goes to And on not with street. that respect talk report. about course, as starting core price, numbers people you just with along price, talk price. we what That's those When about we give what and So point. with that what then, are how put also to guide of what when that's the And a is we it's it's they but we report, we price. they ultimately some expect how

about we're understandably, we it way, we drive or necessarily -- the price So talking means about way how to talk that it's going one volume.

had again, But as We that know here's exited are shedding. little XXXX, what we so a we And probably do know. we different. calculations purposeful the

was contracts So if okay ultimately we from that they we said walked because on of a it, shedding were that purposeful from hold customers. we at and were about such quality rebid volume, is or of a in to knew that negative wouldn't we we away poor a point contracts rate X.X% that revenue or run way

and acknowledged go. trade-off, people Additionally, pricing look make a trade-off. our we that we there's in that When encourage acceptable which strategy, that margins you we acknowledge is at where trade-off think price to volume an we've

I'd would and so say at of X those for exit you comparisons each that. of see like about to rate drivers things, if difficult look be quarter-specific then And -- weather point or our additive two

we've QX then disposal, in So And to but we comparisons we was already as why, tough only because also that said the not in, rate the around had exit we last that's we of QX, weather in hurricane-related seen. year X.X%. have coming know

that's the year coming most the how we of that those into QX purposeful over about course reason so negative some year, And think we for and improving the in as anniversary that losses. of

new. call. would And purposeful again, Walter, about on we model number our I is us by in the -- shedding the add, so But one, not talked last this

said to all know when it. or you year it, years that out, who are to have in, XX% private not improve either going M&A, in have decades, XX% for $XXX it in, okay? When So We that at their a active that don't company double acquiring million $XXX is we there's okay? done that year of lose to revenue year really million, use revenue this some do, 'XX, maybe number, acquire price out, in of it difference. very year point a are you're this Others to year of we've you a model

of RNG effectively up competitor And in volume, X% nation for you X%. it's that's difference with be proxy heard X%, that is say up economy largest making the shows now So on the flat. that is dead to would the greatest and economy the underlying who the why our Oh, the

negative. said It's it's X. growth X just -- you at what volume That's X if shedding, was it So that so X to and simple. you're do they organic

question from Our Cowen. comes next from Schumm TD James

you I near high-level or you a maybe again, wondering a But on it peers. in relative perhaps on maybe advancements future lot the touched about haven't if EPR will And the but exposure legislation. in I'm U.S., change had to technology recycling question, talk if given could. to touched Canada, mean, bit. recent little Just you in it your that historically, of you and But

Yes. think of James. Well, has number difference, model a I it been one, part

in I areas, occurred okay? our mentioned, model. some than tend be to urban As substantially more larger the U.S. just have a recycling have of lot we model recycling in day, our a market coastal is better very every the exposure little peers And less aid question in of that has urbanized, business every year. So And produce can which acceptable no a right to There bit is returns technology making with and less the will we right it. and exposure some technology. the

yes, time, you of as push that also in recycling as not been many So up push. is diversion states a over much legislation a for recycling grow point, percentage. will There there a see had to this and

That will extends ultimately to expansion. of on and our the It develop, continue it life good landfills, So which that. asset. non-replicable we're landfills are with timing a limits for capital for

it's process, very that a we overall. it's evolutionary with so comfortable feel And

operation process objectives, to service a for facilities. use investments seeing make units we and built growth of make and latest our of even not derisk and the cases, business and robotics James, own Ron's we at point, new that, increasing XX in recycling facilities it course, all to add technology we to provide, been our you and to would because do one to ourselves continue have facilities it an better I sustainability added year, recyclables and it's two ourselves we've but in have is our just And the that, we every

improving we've advancing so and And been that.

will events we not wondering the at then strategy a is in to if here? there And Great. prevent XXXX much landfills of wake another ETLF the XXX-plus other should in rise Okay. landfill landfill expect I'm like your or in Chiquita costs at change change just

should think incremental an that costs happen don't we've learned more What I on Chiquita change because our step help occur. increase to impact one, post earlier said, as are expect what Chiquita or very, is, that of that the important elsewhere, a number on we've are to very are under would circumstances. I certainly if Can minimize very they think were doing Chiquita. reaction can. organic in They what they But unique is we Well, happened occurs . at one landfills at rare. ETLFs what you natural relative happened is

And centralized so frequent a landfill, on some monitoring basis. more we temperature protocol have of made some changes engineering more well

that have temperature if can We auto production we cause we stopped that, as much tend company, of will aluminum a some experience drill to years ETLFs, earlier. decided material that alleviate the over believe we X sort that we untreated fluff. wells to And shredder ago, material or of as then be taking which

should through see rippling are they not we So things things but yes, that are the P&L. doing, you there are

Moore Our next Stephanie question from from comes Jefferies.

I wanted some the of pricing to back touch on color.

have maybe going is bit on on of a touch think and That be would how to compared your years. little customers your helpful. outside this index pricing conversations how been you any maybe with prior I contracts,

Coming And we that. of say I'd pricing, that years same needing of knew we implied Sure. competitive outsized Doing year, things of XX%, of looking those the XX%, are X.X% that forward increases that level off that markets, years in well and talked X we XX%. that expected. last north playing about were not increases, of we X were to were much the coming each price in our as into we'd pretty out really right.

pretty X.X% that is price to say of of down range in historic type conversations, in relief it's those the X%, of to a similar levels. more increases. terms be on So I'd retention

in XX% are come more kind hyperinflation, out. of of periods And to back playing it had You was that say conversations that. than the type expecting stickier reverted level. way levels, those we've I'd and there when We've that's normalized was

a questions helpful. some the follow-up Great. That's maybe Arrowhead then on just deal. And prior on

or Arrowhead markets? on opportunities you that provide similar do footprint M&A, Those your future to traditional about of see the think transfer similar you horizon? greater maybe As access rail outside core

waste as unique I Well, waste doesn't to And move markets say over at looking But rail asset. perhaps also move that tell more in will I analogous was today. is and modality Arrowhead will currently that -- anything a are that, look, that would by it. continue to in time. geographies, Stephanie, upwards prices time contract. it over a It is And we that will you, aerospace not landfill natural

I So that type incremental is occur but be I will opportunities that, don't will acquisitions, there over feel time. for do that Arrowhead it believe but imminent,

And our Securities. Sommer from Truist question Tobey comes from next

Tobey. Jack This Wilson is on for

there sort spend? So that Chiquita to be of quarters especially or specifically any given are in going heavy capital and XXXX, with the RNG expenditures is

CapEx, unique interest year, that of No, there's that reasons be nothing lumpy free for can as any and reminder in flow quarter. any stands But a of outside a variety generation taxes. for out instance, the in being just cash quarters

too quarter. up in on I hung and activity one So wouldn't get individual

in Okay. sort franchise wins in York or the intentional to And does market shedding, then just regards the at all sort that change of sort sort of how around waiting of your of thinking secondary new you're sort and exposure and New of urban?

I No. opportunistic we're opportunities. mean, of in acquisition terms

And said of types drive remarks, the outcome interested Ron always know of a or of as changed. of quarters deals of strategy we hasn't the the his are say, timing dialogue. As in. lot But our in sellers deals. We markets these we're years even

there's so And change at about that all. in no thinking

floor and to back gentlemen, I'd final question today, closing remarks. our management for turn being any the over that like And with ladies to

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

for We and presentation. call thank conference conclude with we'll you and that, Ladies gentlemen, today's joining.

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