Good afternoon, welcome to the Republic Services Q2 2023 Investor Conference Call. All participants in today's call will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the Star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press Star, then one on your touch-tone phone. To withdraw your question, please press Star, then two. Please note, this event is being recorded. I would now like to turn the conference over to Aaron Evans, Vice President of Investor Relations. Please go ahead. I would like to welcome everyone to Republic Services Q2 2023 conference call. Jon Vander Ark, our CEO, and Brian DelGhiaccio, our CFO, are joining me as we discuss our performance. I would like to take a moment to remind everyone that some of the information we discuss on today's call contains forward-looking statements, which involve risks and uncertainties and may be materially different from actual results. Our SEC filings discuss factors that could cause actual results to differ materially from expectations. The material that we discuss today is time-sensitive. If, in the future, you listen to a rebroadcast or recording of this conference call, you should be sensitive to the date of the original call, which is 31 July 2023. Please note that this call is property of Republic Services, Inc. Any redistribution, retransmission, or rebroadcast of this call in any form without the express written consent of Republic Services is strictly prohibited. I want to point out that our SEC filings, our earnings press release, which includes GAAP reconciliation tables and a discussion of business activities, along with the recording of this call, are available on our Republic's website at republicservices.com. I want to remind you that Republic's management team routinely participates in investor conferences. When events are scheduled, the dates, times, and presentations are posted on our website. With that, I would like to turn the call over to Jon. Thanks, Aaron. Good afternoon, everyone, and thank you for joining us. Our strong Q2 results demonstrate the value created by our differentiated capabilities and the execution of our strategic priorities. We continue to successfully grow our business, both organically and through acquisitions, while enhancing profitability. During the quarter, we delivered revenue growth of 9%, including more than 4% from acquisitions, generated adjusted EBITDA growth of 10.5%, expanded EBITDA margin by 40 basis points, reported adjusted earnings per share of $1.41, and produced $1.26 billion of adjusted free cash flow on a year-to-date basis, a 10% increase over the prior year. We continue to effectively allocate capital by investing in acquisitions to create long-term value. Year to date, we invested $927 million of acquisitions. All transactions were in the recycling and solid waste space, including the acquisition of assets in Colorado and New Mexico from GFL. The M&A environment remains active with opportunities in both the recycling and solid waste and environmental solutions businesses. We now expect investment in value-creating acquisitions to exceed $1 billion for the year. We are making great progress on the integration of US Ecology and increasing the profitability of our environmental solutions business. Pricing realization in this business remains strong. Customers value our complete set of products and services. We have achieved over $110 million in new sales to date as a result of cross-selling our products and services. The sales pipeline is robust, with opportunities for organic growth and expansion of services within our existing customer base. We achieved more than $40 million of annualized cost synergies, and EBITDA margin in the environmental solutions business improved to more than 22% in the quarter. The strong results we achieved in the H1 of the year, along with the positive momentum in our business, supports a full-year financial outlook that exceeds our original expectations. We now expect revenue in a range of $14.775 to 14.85 billion, adjusted EBITDA in a range of $4.34 to 4.36 billion, adjusted earnings per share in a range of $5.33 to 5.38, and adjusted free cash flow in a range of $1.9 to 1.925 billion. Our updated financial guidance includes the contribution from acquisitions closed through 30 June. The results we are delivering are made possible by executing our strategy, supported by our differentiated capabilities, Customer Zeal, digital, and sustainability. Regarding Customer Zeal, our efforts to deliver industry-leading service continues to drive sustained customer loyalty and organic growth. Our customer retention rate remained over 94%, and we continue to see positive trends in our Net Promoter Score, supported by improved service delivery. Organic revenue growth remains strong during the quarter and simultaneously increases in both price and volume. Core price on related revenue was 8.8%, and average yield on related revenue was 7.1%. This includes landfill MSW yield of 6.2%. This is the highest level performance in company history in this category. Organic volume growth on related revenue was 50 basis points. Turning to digital. We have reached a milestone in our efforts to create digital tools to enhance our customers and employees experience, and deliver meaningful financial benefits. The deployment of RISE tablets in our recycling and solid waste collection business was completed during the Q2. The next phase of our digital operations is expected to drive additional productivity savings through route adherence, improve safety performance, and provide more predictable service delivery for our customers. In total, we believe the benefits of our digital initiatives are worth approximately $100 million, with $50 million already achieved and $50 million to be captured over the next three years. Moving on to sustainability. We continue to invest in differentiating capabilities to leverage sustainability as a platform for profitable growth. Earlier today, we announced a joint venture with Ravago, called Blue Polymers. This groundbreaking partnership further supports our efforts to lead in plastic circularity. Blue Polymers will utilize recycled olefins from our polymer centers to create blended pellets for use in manufacturing sustainable packaging. We expect to open four facilities beginning in late 2024, with earning contribution beginning in 2026. Development of our polymer centers in Las Vegas and the Midwest remain on track, with the centers becoming operational in late 2023 and late 2024 respectively. Demand for recycled plastics remains strong as the consumer goods industry continues to work toward achieving their sustainability goals. For example, we are partnering with The Coca-Cola Company to supply recycled PET from our polymer centers for use in sustainable packaging. The 57 renewable natural gas projects being co-developed with our partners are advancing. We expect four of these projects to be operational by the end of the Q3. Finally, we continue to believe that creating a more sustainable world is our responsibility and a platform for growth. We recently published our latest sustainability report, highlighting the progress we are making on our 2030 goals. These goals are supported by investments we are making in Polymer Centers, the Blue Polymers joint venture, renewable natural gas projects, and fleet electrification. I will now turn the call over to Brian, who will provide details for the quarter. Thanks, Jon. Core price on total revenue was 7.3%. Core price on related revenue was 8.8%, which included open market pricing of 11% and restricted pricing of 5.3%. The components of core price on related revenue included small container of 12.3%, large container of 8.8%, and residential of 8.3%. Average yield on total revenue was 5.9%, and average yield on related revenue was 7.1%. We continue to price new and existing business ahead of cost inflation to drive margin expansion in the underlying business. Volume on total revenue increased 40 basis points, while volume on related revenue increased 50 basis points. The components of volume on related revenue included an increase in small container of 1.4%, an increase in residential of 80 basis points, and an increase in landfill of 3.7%. Landfill was primarily driven by an 8.3% increase in special waste revenue. Volume growth was partially offset by a decrease in large container of 1.3%, primarily due to a slowdown in construction-related activity. Moving on to recycling. Commodity prices were $119 per ton during the quarter. This compared to $218 per ton in the prior year. Recycling, processing, and commodity sales decreased revenue by 1.1% during the quarter. Current commodity prices are approximately $115 per ton. We believe commodity prices will remain relatively flat with current levels in the H2 of the year, and we now expect average recycled commodity prices in a range of $110 to 115 per ton for the full year. Next, turning to our environmental solutions business. Q2 environmental solutions revenue increased $104 million over the prior year, which primarily relates to the acquisition of US Ecology. On a same-store basis, environmental solutions contributed 20 basis points to internal growth during the quarter. Adjusted EBITDA margin for the environmental solutions business was 22.5%, a sequential increase of more than 150 basis points. Total company adjusted EBITDA margin expanded 40 basis points to 30% during the quarter. Margin performance included: a 50 basis point decrease from recycled commodity prices and a 30 basis point decrease from acquisitions, which was fully overcome by a 100 basis point increase from net fuel and margin expansion in the underlying business of 20 basis points. Year-to-date adjusted free cash flow was $1.26 billion. Our performance through the H1 benefited from the timing of capital expenditures and cash taxes. Year-to-date capital expenditures of $550 million represents 33% of our projected full-year spend, and year-to-date adjusted cash taxes of $99 million represents 40% of our projected full-year spend. Total debt was $12.2 billion, and total liquidity was $2.1 billion. Our leverage ratio at the end of the quarter returned to approximately 3 times. With respect to taxes, our combined tax rate and effects from solar investments resulted in an equivalent tax impact of 26.8% during the Q2, which was in line with our expectations. We expect an equivalent tax impact of 25% in the H2 of the year, resulting in a full year equivalent tax impact of approximately 25.5%. With that, operator, I would like to open the call to questions. We will now begin the question-and-answer session. To ask a question, you may press Star then one on your touchtone phone. In the interest of time, we ask that you limit yourself to one question and one follow-up question today. If your question has been answered and you would like to withdraw your request, you may do so by pressing Star then two. If you are using a speakerphone, please pick up your handset before pressing the keys. Your first question comes from Bryan Burgmeier of Citi. Please go ahead. Good afternoon. Thanks for taking the question. You know, on the Blue Polymers announcement this morning, is that something that's already captured in the pro forma earnings from the Polymer Centers that you've spoken about previously, you know, or is this going to be incremental? You know, if it is incremental, could you give us a sense of the potential earnings impact? No, it's incremental. Think about that, Polymer Center producing two things, PET on one side and olefins on the other side. The PET, we take into a flake, basically, a hot wash, clean flake that's food grade, that can go right back into water bottle manufacturing or other types of PET applications. On the olefins, it takes a slightly different path, so we sort, get full collection of that olefins, and then we feed the Polymer Center. This basically guarantees the demand on the back end of our Polymer Center for the olefin side of it. Ravago is world-class at compounding and blending olefins to create unique products. That's why we partnered with them. We think we can provide the right application to the market. We get to participate, you know, not only do we get the supply, so a fixed supply agreement on one side, we get to participate in the benefit and the upside as a 45% minority JV partner. Yeah, from an economics perspective, you know, we look at our equity pickup, that, that one-line pickup, beginning in 2026, two centers somewhat contributing in that year with about $15 million. So you can think $7 to 8 million per center, and then getting $78 million incremental in both 2027 and 2028. Ultimately, we see $30 to 32 million worth of EBITDA for all four at run rate in 2029. Understood. Thanks for that detail. If I can just maybe follow up on the recycling business. I think your filings say your, your volume is about 80% fiber. You know, once the Polymer Centers are online, do you think that 80% fiber exposure drops a bit, or is there maybe a different way we should start to think about value versus volume? Thanks, I'll turn it over. Yeah, listen, initially, it won't drop much, at least from a volume standpoint, because what we're really doing with the Polymer Center is taking things that are downcycled today and some material along the way, and that downcycling is lost and landfilled to get full volume recovery out of that plastic and get much higher yield because we're driving true circularity. These Polymer Centers are built actually to take third-party product over time. Over time, we'll flow third-party product in there that will put more plastic into the system and then, you know, dilute the fiber percentage, right, a certain level, but you're probably talking more like, you know, going from 80 to 75 versus, you know, a major change in the mix. The next question comes from Toni Kaplan of Morgan Stanley. Please go ahead. Thanks so much. You mentioned a couple of comments on volume, and I was just wondering if, you know, volume was sort of in line with what you were expecting or if it was a little bit lighter. And I know you mentioned the construction activity and, and the special waste, was something mentioned by one of your competitors as slowing. I know here you, you got the 8.3 increase in special waste revenue, but just anything on volume trends and, and where things are above or below what you were expecting and how you think for the rest of the year? Yeah, I'd say broadly kind of in line with expectation, probably slightly ahead in certain areas. Construction, we anticipated that being down. We saw residential and commercial starts obviously start to soften in the H2 of last year, there's a lag effect, as you know, we have jobs that are getting completed. So, you know, we're down 3.8%, but we're, you know, really shrunk pricing there. We've taken the opportunity there to stay disciplined on price and making sure that, you know, we're getting a positive mix, right, even in that environment. Others, so special waste, right, is attractive, right? Part of that special waste clearly is our cross-sell initiatives. With the US Ecology acquisition, right, we have now a unique offering in the marketplace, and we're seeing customers, you know, demand for that unique offering, so that's certainly helping us. Small container was a bright spot, right, in terms of volume growth for the quarter. I feel really good about that as well. You know, again, I'd say broadly in line with what we expected. Yeah, if, and Toni, if you remember in our original guidance, the range on volume was 50 basis point to 1% positive, and now we're thinking it's at that, you know, still within the range, but at the lower end. At the same time, we increased our guidance on average yields, right? The flow-through and the contribution of a 50 basis point increase on yield is much more significant to the enterprise and our results than the 50 basis point decrease on the volume side. Yep, understood. Then you mentioned the partnership with Coca-Cola. Can you talk about potential impacts from that? It might be a little bit longer term, but just any thoughts on how to quantify how you're thinking about that, that partnership and the benefits to you? Thank you. Yeah, Coca-Cola has been a great partner. I would say this, demand for our product out of the Polymer Center, outstrip supply by a lot, right? We were able to talk to a number of parties, right? We could have sold the Las Vegas center out 3 or 4 times over without challenge, just because the market is so short supplied for this type of RPET, that's food grade. We're taking it right now, the single site. Over time, we'll take the Midwest site, and then these partnerships will evolve, and I'm certain they'll grow, right, as we expand the network. That's all we're disclosing at this point. Terrific. Thank you. The next question comes from Tyler Brown of Raymond James. Please go ahead. Hey, good afternoon, guys. Hey, Tyler. Hey, Brian, just real quick, from a modeling perspective, what is the expected contribution from M&A in the new revenue guidance? I think it was supposed to be maybe a 3% contributor coming into the year. Is it maybe closer to 3.5%-4%? Then how much rolls into 2024 based on what we know today? Yeah, the in-year contribution rollover from 22 transactions, as well as the in-year impact from 23 transactions, we're thinking, 4.25%, right? Okay. The rollover impact into 2024, right, from the deals that were completed in 2023, we think adds 50 basis points to our 2024 revenue growth. Okay, perfect. That's helpful. I just kinda wanna think about the EBITDA a little bit. It looks like you raised EBITDA by, call it, $50 million, if I'm not mistaken, you actually lowered your commodity assumption, you added in some M&A. Basically, I'm trying to bridge that change. How much of the EBITDA change was basically core versus some other moving pieces, if that makes sense at all? Yeah, let me answer the question. The short story is that, that the, the entire increase is essentially the underlying business. Let, let me go through some of the, the, the puts and takes. To your point, right, we've added EBITDA associated with acquisitions, but most of those acquisitions were completed mid-year, so you're getting about half the contribution. We've also got deal and integration costs. 2 of these deals required regulatory filings, so we had heavy legal costs. We also have a fairly significant integration cost, just because one of those deals requires that we rebrand the trucks within the first six months. The contributions from acquisitions in year is still positive, but it's somewhat muted. To your point, that's further offset by the reduction in recycled commodity prices. If you think about taking all those things I just mentioned relative to our original guide, it's a relative push. Okay. The $50 million increase in EBITDA at the midpoint is essentially the increase in price flowing through to the bottom line. Okay, perfect. Yeah, okay, that's what I thought. Okay, just real quick on my last one here. If we just exclude Blue Polymer and we just look at the Vegas facility, what is the expected EBITDA impact of that facility in 2024? Then how dependent will it be on recycled plastic prices? Because we have seen some weakness there recently. Basically, sorry, does this Blue Polymer JV, does it kind of inoculate that offtake risk longer term? Am I thinking about all that right? Let me go ahead and start. We had a couple questions there, we'll kind of unpack some of those. The expected contribution from just the Polymer Center, this is the one in Vegas in 2024, is $15 million of EBITDA contribution in 2024. You can think of about an incremental $20 million per year thereafter as we bring other centers online, ultimately getting to about $80 million worth of EBITDA at run rate in 2028. Your other point, on the Blue Polymers, yes, we are going to be selling all of the olefins coming out of the Polymer Center to the Blue Polymers JV. When you start thinking about the, the, the offtake agreement there, that guarantees, right, a contractual rate for all of those units leaving Blue Polymers on the olefin side. I'm sorry, Polymer Center on the olefin side. Okay, perfect. Yeah, it kind of helps inoculate the offtake longer term? Yes. If I read it right. Correct. Okay. All right. Thank you guys so much. Thank you. Thanks, Tyler. The next question comes from Jerry Revich of Goldman Sachs. Please go ahead. Good afternoon, and good evening, everyone. Hey, Jerry. Jon, I, I'm wondering if you could just expand on comments you, you recently made to, to The Wall Street Journal. You spoke about having visibility on double-digit top-line growth here, in the medium term. I'm wondering if you could just unpack what gives visibility on that between Polymer, M&A, yield, other moving pieces and, you know, in that type of top-line environment, do you think you can still deliver the 2x leverage between revenue and earnings that Republic has done over the past decade? Thanks. Yeah, we're certainly starting with price, right? That's always the first component, right? We have to price ahead of our costs. You've seen the organic growth picture, listen, the underlying solid waste and recycling business is a slow growth business, right? We expect to grow slightly faster than the market, only slightly, because it's a highly contracted market, and shares don't move easily. Again, we're always going to stay disciplined on price first. As we've expanded into environmental solutions, right, the underlying growth on the from an organic standpoint is certainly a little stronger. That's a tailwind. On the growth side, you know, we're doing more M&A than we ever have, right? It was, you know, 6 or 7 years ago, we talked about spending $100 million a year on M&A, right? That's been ramped up to 500 to $ 700 million, and obviously, we had an outsized year last year with the US Ecology acquisition and got to $3 billion. Even outside US Ecology, it's $800 million of deals outside of US Ecology. This year, you know, we've said more than $1 billion, and we're already, you know, sniffing up against that number. M&A is certainly contributing. Our other sustainability investments, right, are nice contributors and probably a little less on the top line in terms of really moving the needle, given the scale of the business, but on the bottom line, right, these are kind of high EBITDA margin investment opportunities, very high return. We feel great about that over time. Super. Brian, can I ask separately, in the quarter, you know, really strong margin performance, you know, your COGS per unit were up just 3%. Any in terms of lumpy items that contributed to the results in the quarter, or were the results pretty clean? It sounds like attrition was pretty low, but I'm wondering, were there any other moving pieces that helped margins or costs in the quarter that we should keep in mind before run rating the really strong results? Well I would say there's always some puts and takes, but I would say if you aggregate those from a net number perspective, it was a fairly clean quarter. Well done. Thank you. The next question comes from Michael Hoffman of Stifel. Please go ahead. Hi, good afternoon. Thank you. Brian, could we walk through a dollar reconciliation of last year's EBITDA to this year's EBITDA on a dollar basis? Not just the aggregate change, the $50, but what are all the puts and takes? Because I think, I have this sense that we're understating the power of solid waste by just saying $50. This is on the guide. But- Sorry, I meant the guide. Yeah. I meant the guide. Yeah, the guide. Michael, as I mentioned, we're not going to get into the, you know, individual components of the EBITDA contribution of our acquisitions and other things. What I can tell you, as I, as I just said, with Tyler on the phone, if you take a look at the in-year acquisition contribution, net of those deal and integration costs, right? That is a positive number, which is almost entirely offset by the reduction in recycled commodities. That reduction in recycled commodities is about $15 to 20 million negative compared to our original expectations. If you look at guide to guide, right at the midpoint, our EBITDA is up $50 million, which is the underlying business made up primarily of relatively higher price. We took our yield from, you know, 5.5% on total revenue to 6%. We took it from 6.5 unrelated to 7, so that's that 50 basis points, as well as just outperformance within the environmental solutions business. That's what's contributing, right, to the overall increase in EBITDA. Okay. Could we then talk about environmental solutions, and would you talk about the price volume mix there? Because I think it's important for everybody to see that there's a combination of both and that the, the pricing of a scarce asset continues. Yeah, let me start there, Michael. We're working through that. Obviously, it's a little bit like special waste in terms of there's a mix issue, that there's a lot of unique products and services. We haven't nailed yet what we might report externally in terms of a, a price or a yield metric there. Certainly our aspiration over time, whether that's for, you know, large parts of the business, like, you know, yield per drum or things like that, work through it. A, a huge portion of the outperformance there is price. We've taken multiple double-digit price increases, and we will lead from a pricing standpoint. You know, that's caused a, a few units to be shed in certain places, so we found the ceiling, but we're unafraid. These are valuable assets, impossible to replicate, and customers are valuing what we're offering. We're going to continue to push on that front. You know, that also combined with a cross sell, which is where we're driving a lot of the volume, has been a really good sorting picture for that business. I mean, just to put some numbers on that, Michael, if you take a look at the environmental solutions business, this time last year, it was 17.1% EBITDA margin, this quarter, 22.5%. That 540 basis points of margin improvement is essentially most of that being price driven, but also just better overall utilization as well. You know, we're becoming more efficient, and we're optimizing from a labor perspective. When we do get those units, not just because of the price alone, but as far as the overall profitability of each one of those jobs, we're just becoming, you know, overall, more efficient as we have better utilization of the assets and the resources that are providing those services. Okay, if I could just tease out one thing. You know, we've had negative trends in ISM PMI. We're below 50 on the index. It looks like it's floor bottoming, but is there positive volume, even if I don't get the split, there's positive volume plus a lot of price? Yeah, I think, yep. We look at all those indices, too, Michael, and I, I think what we're not fully accounting for is a lot of the infrastructure spend and the government spending is flowing through, and we're certainly getting a lot of opportunity there. Okay. I think the other thing, too, Michael, that we're also seeing right now as well, is the benefit of the cross sell. You know, as we said, we've now, you know, increased or we've re-reported more than $110 million in new sales, which is positively impacting both the Environmental Solutions business as well as the Recycling and Solid Waste business. More of that positively impacting the Environmental Solutions business, just because when you take a look at the revenue per customer, it tends to just be higher than we see in Recycling and Solid Waste. All right. Well, let me squeeze one more, if I can. You raised price in 4Q, you raised it in 1Q, did you raise it in 2Q as well? We are, actually in the process of raising prices here early in 3Q. Perfect. Thank you so much. The next question comes from Walter Spracklin of RBC Capital Markets. Please go ahead. Yeah, thanks very much. Good afternoon, everyone. Just on the volume, good job on, on, on growing that volume amid some of your peers seeing it contract a little bit. I'm just curious as to whether, you know, we're hearing a little bit on the, on the price competition from smaller players, that are, that are somewhat, less, less disciplined in that regard, and, and, and, and some of your peers walking away from that. Are you seeing any evidence that smaller players are acting a little bit more aggressive here? Do you, do you suspect that this will ultimately translate in either pressure on pricing or, or on volumes for your business going forward? No, we haven't seen it. Again, there's always, you know, an ankle biter in a market here or there, who's gonna take advantage of, you know, try to grow volume and figure out pretty quickly, right? That's a tough way to make a business and earn your cost of capital. Small container, right, you know, 9.5% yield, 1.4% volume, are really, really strong numbers for us this quarter. That's a place we often see the price competition come in. That's where they try to attack, because that's a profitable part of the business, and people try to you know, build their business there. They might start out in resi script or start out in temp roll-off, and then they, you know, quickly get into that because that's the higher margin stuff. We've not seen the market broadly turn into a negative direction at all. The other thing, too, you have to remember is that there are still supply chain constraints on getting new trucks. In order to sit there and to, again, have that type of behavior, you'd have to have capacity in your system or be able to secure a new truck in order to service those new accounts. We are not seeing those supply chain constraints easing anytime soon. Right, being a bit, a little bit of a natural, natural limiter there. On the CapEx spend, we saw a few of your competitors, again, increase CapEx a little bit unexpectedly in certain cases. Just curious how you review your CapEx spend. There is, you know, and new projects as they develop, are you, have you looked at your budget for this year? Is that something you do on an ongoing basis? Is it upcoming? Are you seeing evidence of projects that perhaps weren't on the horizon or perhaps not in your purview that are starting to pop up? Just curious as to, you know, on a time frame, when you might update your CapEx budget based on what projects might or may or may not have come into the fold. Yeah, no, we're doing that on an ongoing basis, right? We're looking at opportunities, and, you know, Polymer Centers and Blue Polymer are good examples of things that we think if they're value creating, sustainable investments over time, we're gonna make those investments. But we think also about, hey, normal course of business, what is the budget? Not having any big CapEx bubbles. In this year, for example, the supply chain is challenged on the truck side, and so we're able to pull forward a little bit of a spend on heavy equipment this year, and some of that truck spend then will flow into next year. Across the two years, it will be relatively balanced. There's always a little bit of push-pull on the margin, but we're looking at it all the time. Then, you know, thinking about it next year, if there's things that are, you know, really value creating, we'll, you know, put those into the budget next year. But we're kind of giving you what we see in terms of Blue Polymer and Polymer Centers, in terms of investments outside of that, including the landfill gas energy projects we've already talked about. If you look in the details of the guidance, when we do the reconciliation of adjusted free cash flow, included in that is a guide for the capital expenditures, and the number that's in there in the revised guide is exactly the same as what we guided back in February. Got it. Last question here is on acquisitions. You had a couple lumpy chunky ones in the quarter. Is it your intention now to digest a little bit as you go into 2024? Or is this something that you think you could keep up a fairly solid clip that even X those chunkier acquisitions you would have done otherwise? No, pipeline remains strong, both on the recycling and solid waste and the environmental solutions side of the business. You know, we're mindful of not loading up a specific geography, right? If they've done a big deal, we wanna make sure that they can digest that and get that operational. You know, we've got a good pipeline of, you know, deals of all sizes, and, you know, we look forward to a strong H2 and then into 2024 as well. That's fantastic. Appreciate the time. Thank you. Thank you. The next question comes from Sean Eastman of KeyBanc Capital Markets. Please go ahead. Hi, team. Thanks for taking my questions. Particularly in light of the way the EBITDA guidance raise was framed in terms of that, you know, that pricing falling through to the bottom line and, and relative to the comments in response to Michael's question about, you know, raising prices, you know, successively each quarter. Just in light of, you know, with those as context, could you just talk about what you're seeing in the underlying inflation in the business? How those trended through the quarter, how you're responding, how these pricing programs are responding to, to those trends? Sure. Yeah. different picture, obviously, right? Labor has been a really good story for us in terms of we brought the turnover down. Starting to see that inflation certainly modulate. Maintenance has been a little more of a challenge, and it's twofold. One, just the underlying, you know, tires or things and true inflation. The other is the challenge of the supply chain, right? While we're growing the business, right, and we're not getting the replacement trucks or the growth trucks we need at the exact clip, that's causing us to drive older trucks, and we're going to do that to service our customer and capture the opportunity. It's still value creating, but it is going to show up in that maintenance line in terms of older trucks at higher maintenance cost on that front. We expect broadly, all the cost categories, we're starting to see that inflation modulate in the H2 of the year, and so we should see pretty good price cost spread the remainder of the year. Okay. Then maybe taking that a little bit further, just trying to think about the jumping off point for margins into next year, just assuming kind of status quo on some of the, the, you know, commodity-related inputs. You know, I'm trying to think about, you know, the, the typical 30 to 50 basis points. You know, should we be building that number off of the H2 outlook? As much information or thoughts as you can provide on that bridge would be really appreciated. Yeah, look, we're not providing guidance right now for 2024. Totally understand. Again, if you think, when we talk about that, you know, kind of 30 to 40 basis points per year, we're doing off a full year count. You know, again, if you take a look at, at the midpoint of the EBITDA and the midpoint of the revenue, you can get a baseline adjusted EBITDA margin and think of it off of that, because we're saying this year is, you know, where we're expecting a relatively normal level of seasonality. We always expected it to follow the normal seasonal pattern from a, from a margin profile perspective by quarter. I think if you look at the full year number, that's, that's a good baseline. Okay. Thanks a lot, gentlemen, and nice update here. Thank you. The next question comes from Noah Kaye of Oppenheimer. Please go ahead. Hi, sorry, this, this is Noah Kaye on. How are you? Hey, Noah. Hey, thanks for taking the questions. Maybe we can, just to make sure we understand, to put a finer point on the last question, how you think about kind of the, you know, yield and margin cadence for the back half. You know, there are some, some, you know, odd comps, obviously, last year, to consider versus what feels this year, like you said, more like normal seasonality. Can you maybe help us put a little bit of a finer point on it for modeling purposes? Well, and again, I would say it had more to do with the prior year than the current year. We always said this year. Exactly we expect more of a, a normal seasonality sequentially. you know, again, when you take a look at, in, in a normal year, your, your 2 best quarters tend, tend to be Q2 and Q3 because you're capturing those, those summer months, right? again, you start pulling in some of the, in the colder climates, where some of the units start to step down, and that's why you see comparably lower margin performance, lower revenue, lower EBITDA in Qs 4 and 1. as you kind of see this year, and you kind of do the math, the, the math, it looks like H2 will be, slightly more contribution than H1, kind of a 49.5, 50.5, you know, type contribution. you know, again, we would say that that's relatively in line with, with our original expectations. Okay, great. I think, by the way, I take your point around higher flow-through on price versus volume and agree with it all day. So part of this is just trying to better understand, because I think, there's been a theme to the earnings around, you know, what the volume environment actually looks like. So I just want to make sure I can reconcile something. I think the, the guide basically implies flat volumes, right, for the back half. You know, as you said in your commentary, you're not really looking at a flat volume environment. You're still looking at growth. So just how do I reconcile those? Are you maybe just being a little bit conservative, given some of the indicators? Just help us make sense. Yeah. I think just caution and conservatism, given the construction market, given obviously the manufacturing industry we talk about, and just, you know, there's some general uncertainty out there. Have we really stuck the soft landing or not? We want to be cognizant of that. Listen, in the broad scheme, we're, we're still raising, right? We've got a great story to tell and very, very positive, on the volume standpoint, we're just being conservative. Okay, great. That's helpful. Thank you. The next question is from David Manthey of Baird. Please go ahead. Thanks. Good afternoon, everyone. Question on environmental solutions. In broad strokes, can you outline what that segment might look like in, in five years based on your strategy today? Yeah, we expect to keep growing. You know, this question comes up often, what percentage of the mix is going to be, right? We don't have a target percentage mix. I can tell you that we also plan on growing the recycling solid waste side of the business. You know, whether that is, you know, 12%, 14%, 15%, 16%, you know, one year might be outsized one or the other, but we expect it to contribute. The most important thing for us is it's related, right? It's the thing that's helping us drive cross-sell and stickiness with our customers, not just in the ES side of the business, but in the recycling and solid waste side of the business. Same formula there. We're going to start with price, right? We are going to look to gain organic growth, right, and grow, you know. basis points ahead of the market, but not wildly ahead of the market, and then have a strong M&A pipeline, but stay very disciplined in terms of double-digit returns and make sure that any deal we do there fits our strategy. Okay, thank you. Second, I guess someone has to ask about PFAS. With your current environmental solutions capability, is PFAS remediation a net positive opportunity today for Republic, or do you need other pieces to make it that way? No, we see it as a positive. Again, this is not, there's laws are still evolving here, and the regulations are, and so we're actively having discussions at, you know, federal, state, and local level, right? To make sure that we're not, and the industry broadly, right, isn't the one holding the bag, right? They should want us to take care of PFAS because we're the one collecting it. We didn't generate it or, you know, create it. We're gonna be mindful that we're not penalized because we're doing the right thing from the environment. Then you flip it on the ES side of the business, lots of opportunities already emerging and lots of customer discussions for how we remediate. We have some solutions today. That portfolio is gonna grow, so we think this is a net positive for this one. Great. Thank you. The next question comes from Tobey Sommer of Truist Securities. Please go ahead. Thanks. Can you keep this pace of margin expansion in ES into 2024? Where's the ultimate end goal? Maybe speak to the drivers from this low 20% range. Yeah, the ultimate end goal is to harmonize the financial profile of this business with the recycling solid waste out of the business. We think we first will get there in free cash flow conversion, because over the cycle, this side of the business has a little less capital intensity, and then ultimately margin, right? We're gonna get there in a very disciplined way, right? You won't see the pace of the margin expansion, right? 540 basis points, that's leaps and bounds. We're not gonna keep this pace, but I think you're gonna see steady progress on that front. Listen, there'll be some, you know, movement in this business like there is as the economy ebbs and flows, but we're gonna take a through cycle mindset, continue to serve customers, stay disciplined, focus on people who are generating recurring revenue over time, and, and I think you'll see the financial profile harmonize over time in the two sides of the business. How much higher can you drive retention above the 94% level and still have it sort of be economically advantageous? What's driving service delivery improvement now? I'll start with the end of your question. Certainly, technology is helping us on that front. As we put in the RISE platform, it's just allowing positioning our frontline people to succeed every day. All the information with the customer is in front of them. When things come up like a block stop, they can immediately communicate digitally to our logistics department through our customer service, so we've got a full visibility and can communicate with the customer quickly. Turnover coming down is certainly helping that. Feel good about that on the frontline of the business. Listen, I don't think we can drive loyalty to 100, because at some point, you know, that's unattractive for certain customers who aren't willing to go or want to go from a price increase. There is some natural movement of movement of homes, closures of business, et cetera. We don't think we're done yet, but we, we aspire to take that 94 up higher. Thanks. Last one for me. What are the puts and takes of multiple price hikes per annum as opposed to larger, less frequent price hikes? Well, one would be test and learn, right? When you put out the price increase, right, you can understand exactly how customers react and are we able to retain that work. That's the, you know, the flexibility we have. You know, over time, you're not gonna see us do that. Our normal case in recycling solid waste business is typically annual increases. When extraordinary things happen, like, you know, the commodity issue four or five years ago, multiple price increases in a year, that's not normal course. Over time, the ES business will matriculate to that model as well. Thank you very much. The next question comes from Stephanie Moore of Jefferies. Please go ahead. Hi, good afternoon. Thank you. Stephanie. Sticking on that maybe the ES side and particularly the US Ecology deal, I mean, I think kind of everything that was lying, laid out tonight kind of speaks to the strength you've seen, whether it's pricing or the, the cross-selling. Suffice it to say, is that $75 to 100 million revenue synergy target, presumably, we've, we've blown past that at this point. You know, do you have a new target, or how would you think about kind of ultimately, you know, the opportunity you think continued to, to garner from a cross-selling and pricing standpoint and what that means for that original target? Look, the pipeline is strong. Ultimately, this will manifest, manifest itself in our guidance for 2024, which we're not talking about today, but that will roll right in. US Ecology, which was a great company, we were lucky to acquire the, most importantly, the people, but also those assets. They're now part of Republic Services and the Environmental Solutions business, so we've anniversaried that going forward. You know, you'll see that roll through our volume numbers as we forecast 2024. Okay, got it. Then maybe switching gears, could you provide us an update on the joint venture with BP of the RNG front? You know, maybe any updates or how it's progressing thus far? Yeah, it's progressing with 57 projects, right, and partnership. The largest chunk of that is with BP. It's 40-plus projects of those are with BP. Listen, we're hitting our marks broadly. Now, there's certainly been some push-pull across individual locations, where we've had some you know, some capital delays in being able to get facilities built, but then we've had other places where we've been, been able to redirect and pull forward faster and get that permitting in place. Ultimately, we're meeting our expectations for what's going to come online by the end of this year. I think that's a helpful part of our portfolio, given the number of sites, where you have one or two sites that might run into a little bit of delays. You've got the opportunity to look to accelerate other places. Okay, got it. Maybe, you know, any volatility we've seen with RINs this year and, that really doesn't have any significant impact with kind of your expectations for this, this year and next, just given the structure of the JV. Is that kind of a fair assessment, or how would you talk about any volatility? From a long-term planning, when we talked about, you know, how we were valuing these investments, we assumed $2 RIN prices through the cycle. You know, the more recent uptick in, in RINs prices will actually be upside to our original expectations. All right. Thank you so much. Thank you. The next question comes from Michael Feniger of Bank of America. Please go ahead. Hey, guys, thanks for squeezing me in. Just Brian, the, the M&A rollover, you said next year is 50 basis points. I think typically M&A ends up being margin dilutive, but some of the acquisitions look like nice assets, like Colorado. Just on that 50 basis next year, is there any chance that M&A isn't margin dilutive, that it could be neutral or even accretive based on some of the assets you, you guys were able to purchase? Yeah, on, on, on a majority of that 50 basis point rollover, you know, we would expect that to be at the margin plus. Great. I guess just for my second question, I, you know, free cash flow is tracking well. I think the conversion is going to be in that 44% range, in line with last year. I guess with all the conversations about, you know, sustainability investments and these projects, just do you think that free cash flow conversion is going to plateau, or is there an opportunity for next year for 2024 to see that break out a little bit and step up? What are some things that we should consider that might maybe hold that back or potential upside for that into next year? Yeah, well, a couple of things. So I mean, your observation of relatively flat with 2022. Be mindful, though, that we're overcoming over 300 basis points worth of headwinds between higher cash interest rates, commodity prices- Mm. and the impact of bonus depreciation. The underlying business is actually offsetting all of that to drive a result that looks relatively flat. That said, the contribution, as we start thinking about the RNG plants, and we think about Polymer Centers and Blue Polymers, all of which would be accretive to current company performance, that should all be additive. As long as we don't continue to experience these year-over-year headwinds like we did this year in those three areas I just mentioned, you should start to see that, that flow grow. Great. Brian, just maybe just the last one. Just when I look at the open versus restricted pricing, obviously very healthy. How do we kind of think of those moving parts as we go into the H2? Any visibility we kind of have in the H1 next year, just based on how we do the look backs. Thank you. Yeah, you know, again, when we think about open market pricing, and we've said this, you know, all along, that we expected relatively higher pricing in the H1 as compared to the H2, not really a function of what we're doing in the current year. It's just we start getting into tougher comps. Mm-hmm. Again, it's a year-over-year comparison, so expressed as a percentage, you start to see that, that modulate a little bit. Again, all staying within, call it, 50 basis points of the full year guide. It steps down a little bit. You know, within the restricted, as we look forward, depends really on the, the pricing mechanism. While we see, potentially some of the CPI escalators, right, sequentially start to step down, water, sewer, trash, and garbage trash are doing the exact opposite. Mm. Each month, they tend to improve. Again, we see it being relatively consistent in the restricted portion of the book, just because what we see in step downs of CPI being offset again by those alternative indices. Thank you. The next question comes from Kevin Chiang of CIBC. Please go ahead. Thanks for squeezing me in. Maybe just one for me. I'm, I'm just wondering, when you think of, of, of ES margins from the low 20s to, to eventually 30%, you know, it sounds like pricing is, is, is tracking well. You've got the cross-selling opportunities. Just you've had good success rolling out technology, automation, you know, a bunch of, a bunch of things that have, that have helped improve your solid waste margins. I just wondering how many of those initiatives you've rolled into ES, or maybe how many of those initiatives would be applicable in the ES segment that could help, help bridge that gap? Is, is there a way to maybe quantify, you know, how much that could be the margins if, if you roll out some of that technology into the environmental solutions business? Yeah, no, it's a great question. Right now, that's all cost, no benefit. We're investing a lot in IT and doing a lot of hard integration work. Be it US Ecology, but also ACV Enviro and a lot of the other legacy assets we have all on the common platform, starting with the customer. How do we make that service offering even more compelling? By getting digitally integrated with them. Then there's certainly some things on the operating side of the business, which will also help us drive labor utilization, more efficiency in terms of material flow, et cetera. We haven't quantified exactly what that's worth yet, but that will be part of the path to get to the 30. When we get a little further down the road, we'll talk about those initiatives in more detail. Okay, that, that's helpful. You know, I'll leave it there. It's been a long call. Thank you very much. Kevin. The next question comes from Stephanie Yee of JPMorgan. Please go ahead. Hi, good afternoon. I want to ask about the Polymer Centers, so the Las Vegas, Midwest, and the two other, others that you're planning to build. Is four kind of the gating factor because of how much plastics you're actually collecting in your recycling routes, or if there is a lot of demand, would you consider investing in more than four facilities? Yeah, four was. The business case we based it off of was all the material we collect today. We don't have supply risk, which is great. Now, we built those centers with a capacity to take third-party volume, and we're already getting some of that. We've created a broker desk that's already starting to capture some third-party volume, and it's a great value proposition. For example, if you have a municipally owned recycling center, we can take labor out of your facility, right? Give you a few more, pennies for that load, and it's part of your sustainability story as well, so you share in the environmental benefits of that. You know, over time, right, as that demand for third-party continues to grow, we could imagine, you know, five or six centers. It's regionally based, all hub-and-spoke model, so we've got the flexibility in the network over time, that if the demand outstrips the capacity of the 4, that we'll continue to invest. Okay. That's very helpful. Just on the Blue Polymers JV, can you give us an idea of the CapEx spend that would be coming from Republic, or is it too early at this point? Remember, W e're a minority owner, so it's more an investment than it'll come through CapEx. But we're thinking that our allocable share would be about $40 million per facility or $160 million in total over the next five to six years. Okay. Okay, that's helpful. Thank you. At this time, there are no further questions. I'd like to turn the conference back over to Mr. Jon Vander Ark for any closing remarks. Thank you, Andrea. This month marks the 25th anniversary of Republic Services stock trading on the New York Stock Exchange. I would like to thank all of our stakeholders, including customers, employees, communities, and shareholders, for their commitment and support in building this great organization. Have a good evening and be safe. Ladies and gentlemen, this concludes the conference call. Thank you for attending, and you may now disconnect.