Good day, and welcome to the Waste Connections, Inc. third quarter 2023 earnings conference call. All participants 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 telephone keypad. To withdraw your question, please press star, then two. Please note, today's event is being recorded. I'd now like to turn the conference over to Ron Mittelstaedt, President and CEO. Please go ahead. Okay. Thank you, operator, and good morning. I would like to welcome everyone to this conference call to discuss our third quarter results and to provide a detailed outlook for the fourth quarter, as well as some early thoughts about 2024. I'm joined this morning by Mary Anne Whitney, our CFO, as well as other members of our leadership team. As noted in our earnings release, we are extremely pleased by the durability of our financial and operating results in the quarter, with momentum for continued outsized margin expansion. Solid operational execution drove Adjusted EBITDA margin of 32.5% in the third quarter, as expected, up about 140 basis points sequentially, and up 120 basis points year-over-year, in spite of over $15 million in unforeseen headwinds. Moreover, normalizing for recycled commodity values from just over a year ago, underlying Adjusted EBITDA margin eclipsed 33% in the quarter, and this is total company EBITDA margin, not just solid waste. During the quarter, we overcame elevated levels of risk-related expenses and other lagging effects of higher employee turnover in prior periods, as well as site-specific incremental operating expenses at one of our landfills in California. The expected Q4 and ongoing impact of this evolving landfill situation are currently being evaluated, along with a recent shorter-term development at a landfill in Texas, and as such, weren't anticipated in the full-year outlook we provided in August. We expect to get more clarity going forward, but currently estimate the range of outcomes in Q4 to include impacts of up to $20 million to revenue, Adjusted EBITDA, and Adjusted Free Cash Flow. We remain encouraged by the pace of improvement in employee retention, which, along with our differentiated strategy and execution, should provide for above-average underlying margin expansion in solid waste collection, transfer, and disposal in 2024. On that basis, we should be positioned for high single-digit Adjusted EBITDA growth in 2024 on mid- to high single-digit revenue growth, including approximately $150 million of revenue carryover from acquisitions signed or closed year to date, with upside potential from additional acquisition activity and any further improvement in commodity-related activities. Before we get into much more detail, let me turn the call over to Mary Anne for our forward-looking disclaimer and other housekeeping items. Thank you, Ron, and good morning. The discussion during today's call includes forward-looking statements made pursuant to the Safe Harbor Provisions of the U.S. Private Securities Litigation Reform Act of 1995, including forward-looking information within the meaning of applicable Canadian securities laws. Actual results could differ materially from those made in such forward-looking statements due to various risks and uncertainties. Factors that could cause actual results to differ are discussed both in the cautionary statement included in our October 25 earnings release and in greater detail in Waste Connections' filings with the U.S. Securities and Exchange Commission and the securities commissions or similar regulatory authorities in Canada. You should not place undue reliance on forward-looking statements, as there may be additional risks of which we are not presently aware or that we currently believe are immaterial, which could have an adverse impact on our business. We make no commitment to revise or update any forward-looking statements in order to reflect events or circumstances that may change after today's date. On the call, we will discuss non-GAAP measures such as Adjusted EBITDA, adjusted net income attributable to Waste Connections on both a dollar basis and per diluted share, and Adjusted Free Cash Flow. Please refer to our earnings releases for a reconciliation of such non-GAAP measures to the most comparable GAAP measures. Management uses certain non-GAAP measures to evaluate and monitor the ongoing financial performance of our operations. Other companies may calculate these non-GAAP measures differently. I will now turn the call back over to Ron. Thank you, Mary Anne. We are extremely pleased by our operational execution in Q3, driving results largely as expected, in spite of the incremental headwinds described earlier, with an adjusted EBITDA margin accelerating to 32.5% on continued price-led organic growth in solid waste, reflecting a price-cost spread of 250 basis points. As mentioned earlier, underlying adjusted EBITDA margin eclipsed 33% in the quarter at commodity values of just over a year ago. As noted additionally, we overcame over $15 million in unforeseen headwinds during the quarter, primarily in two areas. First, an increase of approximately $9 million to already inflated risk-related expenses. This development was associated with prior period activity and reflects the higher safety incident rates that accompanied the increased employee turnover in recent years. A reminder that risk is a lagging indicator as claims develop, while turnover is a leading indicator. As we drive down turnover, risk expense will improve, along with claim frequency and severity. Next, we absorbed over $6 million in additional operating expenses at our Chiquita Canyon Landfill in Southern California, where we are managing and working to resolve what is characterized as an Elevated Temperature Landfill or ETLF event. This refers to a reaction resulting in the rapid breakdown of waste at elevated temperatures, in this case, occurring deep underground in an older portion of the landfill, involving non-hazardous waste that was accepted and handled prior to our ownership of the site. While there are currently no impacts to ongoing waste acceptance at the site, the reaction has led to escalating amounts of leachate generation, accompanied by odor impacts. Since communicating this occurrence to the appropriate governing and regulatory bodies, we have been coordinating our efforts to address the odors, handle the leachate, and satisfy the concerns of various constituents. The incremental costs in Q3 primarily included leachate treatment and disposal, along with engineering and monitoring costs. We expect these expenses to expand in Q4 to over $10 million, primarily as a result of increased leachate generation. Beyond that, we have determined that we are not yet currently in a position to estimate the ultimate impact or timing of resolution. We expect to have good clarity of timing and resolution by our February call. The second landfill issue noted earlier is more clearly defined and more limited, but nonetheless expected to impact Q4. At our Sea Breeze Landfill in Texas, we experienced a slope failure at the end of the third quarter that has resulted in our shutting down the landfill and redirecting tons to alternative disposal sites while we complete repairs and site work. The impact of lost revenue and increased expenses at this site in Q4 are expected to be in the range of $5 million-$10 million, depending on how quickly we're able to reopen the site. We currently expect to reopen the site in mid-December. We consider both of these landfill issues to be unusual, site-specific, and non-recurring in nature, although differing in duration. While historically, many analysts and investors may have adjusted for similar types of non-recurring events by adding back the impacts, these are developing in real time, and we are not currently in a position to make a final determination. We have not included them in our outlook for Q4 or our preliminary thoughts for 2024, but in the interest of transparency, are providing the estimated range of potential outcomes in Q4 to include impacts of up to $20 million to revenue, adjusted EBITDA, and adjusted free cash flow. Returning to the strength of our operating and financial performance in Q3, we delivered core price of 8.8% and total price of 7.7%, including a 110 basis point decline in fuel and material surcharges, primarily related to the decline in diesel prices. Reported volume growth of -1.9% on a day-adjusted basis reflected the continued impact from intentional shedding, as expected with recent acquisitions. As described last quarter, right-sizing markets and improving revenue quality should be considered integral to a disciplined approach to acquisitions and therefore expected, especially given the magnitude of acquisition activity we have enjoyed over the past few years. Moving on to the topic of acquisitions. We continue to see above average levels of seller interest, and as typical, some activity getting pushed to year-end. To date, we have about $170 million in annualized revenue closed, with an additional $80 million already signed, and in some cases, awaiting regulatory consents, which are expected to close by year-end or very early in 2024. As such, we have visibility for almost 2% in acquisition rollover contribution in 2024, with the potential for that amount to grow from additional transactions anticipated to sign or close by early next year. Our pipeline remains quite robust across our footprint, including some opportunities to further expand our portfolio of West Coast exclusive markets. We continue to have capacity for outsized acquisition activity while we fund our differentiated growth strategy, including our sustainability-related projects, and expand our return to capital to shareholders. To that end, our board of directors authorized an 11% increase to our regular quarterly cash dividend, our 13th consecutive annual increase since the initiation of the dividend in 2012... 2010, excuse me. While executing our growth strategy, we also demonstrated the ability to drive down emissions and show significant progress towards achievement of our sustainability-related targets, as highlighted in our recently released 2023 sustainability report. In fact, as further outlined in that update, we saw a 14% reduction in Scope 1 and 2 emissions in 2022, in spite of outsized revenue growth, resulting in a 27% reduction in emissions intensity. Moreover, we backed up that progress by doubling our targeted emissions reduction to 30%, and have initiated the process of aligning our emissions reduction targets with the Science Based Targets Initiative, or SBTi. Our updated sustainability report also highlights our progress on the development of incremental capacity for recycling and renewable gas, or RNG generation. We increased our operational offsets by 8% in 2022, driven primarily by an 18% increase in recycling tons, bringing our annual total to over 2 million recycled tons. Looking ahead, we are positioned to significantly expand our biogas recovery through the development of additional RNG facilities, including three new facilities expected to open in 2024. Moreover, we continue to expect incremental annual EBITDA contribution of $200 million by 2026 from a comparable level of investment. To that end, including approximately $125 million-$150 million of capital outlays on RNG facilities anticipated in 2024. We continue to pursue the development of other RNG projects, including at our most recent acquisitions, which we believe will be additive to these amounts as we look to 2026 and beyond. Continued investment in sustainability-related projects is consistent with our objective of value creation for our stakeholders, and along with enhanced disclosure and demonstrated progress, indicative of our commitment to the environment and the communities we are truly privileged to serve. Additionally, we continue to invest in our most important asset, our people, and anticipate additional margin expansion opportunities from innovative approaches to further improve employee retention and engagement. We are encouraged by the progress we have made in employee retention efforts in Q3, with voluntary turnover stepping down sequentially for the fourth consecutive quarter. As compared to the peaks we saw in 2022, voluntary turnover is now down over 20%, and open position requisitions are down over 30%. We look forward to seeing these trends continue and supporting the efforts of our local leaders with resources to facilitate that progress. We characterize our efforts as doubling down on human capital as we renew our focus on empowering leaders for success in our decentralized operating model. Changes include revamping recruiting through upgraded technology offerings and more than doubling training focused on frontline employees. We've initiated a pilot program for our own training academy for drivers and are coordinating efforts for a diesel technician school offering. We're excited about our progress today, and we look forward to seeing continued improvement as we enter 2024, when we should realize the lagging effects from improving retention rates during 2023 and into 2024. As noted earlier, while we deliver industry-leading margins, we are still absorbing the residual effects of higher turnover in previous periods, which include elevated reliance on third-party services, as well as the increased overtime and associated equipment wear and tear, which ultimately have an impact on safety incident rates and the associated costs of risks. The good news is that the progress in retention we're seeing today sets us up for future benefits from improving costs and risk, labor, and maintenance, as the same cycle should play out in reverse when incident rates and severity decline, along with turnover. Now I'd like to pass the call to Mary Anne to review more in depth the financial highlights of the third quarter and to provide a detailed outlook for Q4. I will then wrap up with some thoughts about 2024 before we head into Q&A. Thank you, Ron. In the third quarter, revenue of $2.065 billion was above our outlook and up $185 million, or 9.8% year-over-year. Acquisitions completed since the year-ago period contributed about $103 million of revenue in the quarter, net of divestitures. Core pricing of 8.8% ranged from about 6.5% in our primarily exclusive market Western region, to a range of approximately 8%-10% in our competitive regions. As expected, core pricing stepped down sequentially from Q2 as a result of both the typical cadence of seasonality on reported price and the waning impact of outsized pricing activity from 2022, as compared to previous quarters. The Q3 volume decline of 1.9% on a day-adjusted basis was in line with Q2 and similarly spread across residential collection with the non-renewal of certain municipal contracts, commercial collection from opportunistic shedding of lower quality accounts, and in post-collection in reduced transfer volumes directed to third-party disposal outlets. Our most impacted markets were in our Eastern region, where we have had outsized acquisition activity over the past few years. Looking year-over-year at other lines of business, roll-off pulls per day were up about 1% on revenue per pull, up about 6%, and landfill tons were up 5% year-over-year, largely driven by higher special waste tons, up 17%, with C&D tons up 2% and MSW tons up 1%. The increase in special waste activity in Q3 followed two down quarters and was the result of a few jobs either getting delayed from Q2 or likely pulled forward from Q4, a reminder of the event-driven nature and inherent lumpiness of these projects. Through 9 months, special waste tons are up 1% year-over-year. Moving next to revenues from recovered commodities. Excluding acquisitions, recycled commodity revenues were down 27% year-over-year in Q3 and down 6% sequentially, about as expected, due to a sharp decline in the value of plastics during the quarter, partially offset by improvements in old corrugated containers, or OCC, which averaged $88 per ton. Landfill gas sales were up 7% year-over-year in Q3, due primarily to higher renewable energy credits, or RINs, which averaged about $3. And finally, E&P waste activity. We reported another increase in E&P waste revenue to $59 million in the third quarter, up 6% sequentially from Q2 and up 10% year-over-year. Adjusted EBITDA for Q3, as reconciled in our earnings release, increased by 14.1% year-over-year to $671.2 million, again, above our outlook. At 32.5% of revenue, our adjusted EBITDA margin was up 140 basis points sequentially from Q2 and up 120 basis points year-over-year.... all from solid waste, as we delivered the outsized margin expansion that we projected in our updated outlook provided in August. And as Ron noted, that achievement was in spite of the $15 million in unforeseen cost headwinds overcome in Q3. In fact, underlying solid waste margins arguably expanded by 150 basis points year-over-year on a normalized basis, as headwinds from the incremental landfill costs in Q3 accounted for about a 30 basis point drag to reported margins. Within solid waste, price-led organic growth drove margin improvement across many areas, with outsized improvement in third-party logistics and disposal, and with offsets, most notably from higher risk costs. Beyond solid waste, commodity impacts were a wash. 20 basis points benefit from higher E&P waste activity, plus another 20 basis points from lower fuel rates were offset by recycled commodity values, which, although improving, were still a 40 basis point drag to margins. Net interest expense of $66.2 million reflects a weighted average cost of about 4% on a mix of approximately 80% fixed and 20% variable rate debt, with an average tenor of over 10 years. Leverage remained unchanged in the quarter at about 2.75x debt to EBITDA. Our Q3 tax rate was slightly lower than expected at 21.6%, due primarily to the impact from lower foreign exchange rates for the Canadian dollar. Year to date, we have delivered adjusted free cash flow of $969.3 million, or 16.2% of revenue, on track for our full year adjusted free cash flow outlook of $1.225 billion, excluding the ongoing landfill impacts Ron outlined earlier. I will now provide our outlook for the fourth quarter of 2023. Before I do, we'd like to remind everyone once again that actual results may vary significantly based on risks and uncertainties outlined in our safe harbor statement and filings we've made with the SEC and the securities commissions or similar regulatory authorities in Canada. We encourage investors to review these factors carefully. Our outlook assumes no significant change in underlying economic trends. It also excludes any impact from additional acquisitions that may close during the remainder of the year, and expensing of transaction-related items during the period. And finally, it does not reflect the two landfill situations described earlier, which could result in impacts in the quarter of up to $20 million in revenue, Adjusted EBITDA and Adjusted Free Cash Flow. Revenue in Q4 is estimated to be approximately $2.04 billion. We expect core price of about 8.5% and total price plus volume of 5.5%-6%. Recycled commodity values and RINs are projected in line with recent levels, and adjusted EBITDA in Q4 is estimated at approximately $658 million or 32.3% of revenue. Depreciation and amortization expense for the fourth quarter is estimated at about 12.6% of revenue, including amortization of intangibles of about $39.5 million, or about $0.11 per diluted share, net of taxes. Interest expense, net of interest income in Q4 is estimated at approximately $68 million. And finally, our effective tax rate in Q4 is estimated at about 23%, subject to some variability. And now, let me turn the call back over to Ron for some final remarks before Q&A. Thank you, Mary Anne. Again, we are extremely pleased with our year-to-date performance and our positioning for 2024, particularly given the strength of execution throughout 2023 and the improving dynamics in employee retention. Although we won't provide our formal outlook for 2024 until February, we are able to expand on the early thoughts we provided in August, assuming no change in the current economic environment. We continue to have visibility for outsized, adjusted EBITDA margin expansion, resulting in expected high single digit adjusted EBITDA growth in 2024, unexpected mid- to high-single-digit revenue growth, including price-led organic growth in solid waste, plus almost 2% from acquisitions signed or closed thus far in 2023, with the potential for that amount to grow by early next year based on our current pipeline. To the extent that we see further improvement in recycled commodity values or easing of inflationary pressures during the year, those impacts, along with additional acquisitions completed throughout the upcoming year, would provide upside to these preliminary thoughts, as would the benefit from RNG facilities coming online by 2024. Adjusted Free Cash Flow conversion would be expected to remain in the current range of 45%-50% of Adjusted EBITDA, excluding the outlays for RNG projects described earlier. We look forward to having better visibility on the tone of the economy, the pace of acquisitions, expected commodity-driven activity, and the projected resolution timing of the landfill situation when we provide our formal outlook in February. As we continue to grow towards revenue of $10 billion and more, we maintain that our decentralized operating philosophy, and therefore our people, are our greatest differentiator. Our results to date and our outlook for 2024 are a reflection of their commitments and accomplishments. We recently celebrated our 26th anniversary as a company and had the opportunity to be together as a team with our local leaders for the first time since the pandemic, to renew the relationships that we know drive our results, and to reinforce the vision and values that have guided Waste Connections since its inception. Safety, integrity, accountability, customer service, servant leadership, and being a great place to work. In short, it's about both relationships and results. We appreciate your time today, and with that, I will now turn this call over to the operator to open up the lines for your questions. Operator? Thank you. If you would like to ask a question, please press star then one on your telephone keypad. If your question has been addressed and you'd like to withdraw your question, please press star then two. Once again, that's star then one if you have a question. Today's first question comes from Toni Kaplan with Morgan Stanley. Please go ahead. Thank you so much. Very strong pricing quarter once again. I was hoping you could maybe give some initial thoughts on pricing in 2024. Maybe just kind of ballpark, you know, how should we think about the trajectory? Would you expect sort of price to come down as inflation comes down, or are you not really expecting too much of a drop at all? Thanks. Sure. Thanks, Toni. So in terms of pricing, I'd start with, you'll recall that about 40% of our pricing is CPI linked, and therefore there's that lagging impact. And so the CPI you see this year informs us about how to think about what that pricing looks like for next year. And then beyond that, you know, we think in terms of that spread to drive margin expansion. And so as Ron described, the preliminary thoughts for 2024, saying mid- to high-single digits, including the 2% acquisition contribution, sort of informs you as how we're thinking about price plus volume, making up the other piece to get you to that mid- to high. And then in terms of the cadence during the year, the typical cadence, Toni, is that pricing on a reported basis is typically highest in the first quarter and steps down over the course of the year because of the denominator growing. And so, you know, but most of the pricing gets done early in the year, so we have good visibility by the time we report Q1. Toni, this is Ron. You know, what we strive for continually is to be about a 150-200 basis point spread to the CPI on a ongoing basis. So, you know, sort of whatever you would assume is the CPI for next year, if you're assuming that's 3.5%-4%, I would add 150-200 basis points, plus, to that assumption for the price. As is this quarter, we did 250 basis points better than a cost spread, but we certainly strive to be in that 150-200 at least on a regular basis. Terrific. Very helpful. I also wanted to ask, you did a nice job describing the issues that you're seeing with the landfills in California and Texas, and, you know, you talked about it being not recurring and site-specific. I was just wondering, are there always issues like these, but these are bigger, so they have to be called out, or is there a reason why there are a couple of issues at the same time? And, you know, just trying to figure out, you know, as we go forward, if, if we're gonna see, like, some additional issues. I know these are supposed to be sort of, you know, one time, but, you know, maybe just talk about if anything has changed. Sure. So first off, Toni, nothing whatsoever has changed. First off, we have well over 100 landfills in the company, and in 26 years, we've never once at any of our landfills had one of these elevated temperature events. So that tells you, you know, how rare and how unique they are. They definitely happen within the industry. You know, at probably any given time, there's 5 or maybe 10 of these going on nationwide with various owners, but we have never had one before, and so that is unique. It is also in Southern California and Los Angeles, which makes it a little bit more complicated because of the density of the population. So that's one. The second one, the Texas issue, and these are completely unrelated and coincidental in timing. The second one, the Texas issue, was a slope failure. That was actually our error, caused by us. We could have prevented that, but we missed a few things. We have only had two of those out of over 100 landfills in 26 years. One about 14 years ago and smaller, and we never needed to call it out or did call it out. The other reason we've called out these two is because there has been press coverage of these in the media, and because of that, we felt it would be inappropriate not to communicate it to investors and other listeners when it is in the press. So that's how I would characterize these two as to why they, you know, many would add these back, is because of their non-recurring nature, and we've really never had either of these before. Super. Thank you. Thank you. Our next question today comes from Kevin Chiang with CIBC. Please go ahead. Hi, thanks. Thanks for taking my question. Good morning, everyone. I appreciate, I guess, the uncertainty in how you're gonna deal with some of these costs related to the landfill, both in, I guess, specifically in Q4. But if I look at Q3 and if Mary Ann mentioned it, if you back that out, you know, you saw a solid waste margin expansion of about 150 basis points. Does that change how you think about the launching point for 2024? You know, excluding these issues, or if we treat them as one time, it does feel like you're entering 2024, maybe a little bit higher than maybe what we would have thought a quarter ago. I'm not sure if you'd agree with that. Yeah, I mean, I think, Kevin, so number one, it does not change how we think about the launching point. You know, look, and it has been raised by you, you know, some of your peers, in conversation. Look, we beat our guidance in Q3 and EBITDA, and we overcame $15 million, so we really beat—would have beat by $17 million. So some have said, "Hey, you know, this is up to $20 million in Q4, you know, why wouldn't you just not acknowledge that, and you could probably beat it?" And, you know, what we would tell you is, look, we didn't expect to beat Q3 by $17 million in EBITDA. You know, good things happen, rough things happen sometimes. Mm-hmm. So we're being transparent on the rough things we know, and we do believe they're non-recurring completely. The Texas will be over in Q4. The California will not be over in Q4, but we believe it is still will be non-recurring. And so, no, we don't think of the launch off point or the jump off point as any different with these than we had, which is why, in our comments, we've said we have, you know, outsized margin expansion. Look, we are now up 250 basis points between Q1 and Q3 in margin, okay? Mm-hmm. You know, we have just guided Q4 up substantially over last year's Q4. So the jump off point is clearly higher than, you know, than was anticipated earlier in the year. That's helpful. And then, you know, when I think back to the second quarter call, you gave a lot of color on some of the stuff you're doing on addressing labor turnover. And I think one of the comments you did make was, you know, as you get turnover lower, you know, that could yield about 100 basis points of margin improvement over the next, call it 18-24 months. You called out about $9 million of expense costs that weren't expected in the third quarter. Does that change how you think about the margin opportunity, you know, that you laid out back on the second quarter, whether it's the magnitude of the margin improvement or maybe the timing of realizing those? No, it really doesn't, Toni. Excuse me, Kevin, I apologize. It really doesn't, and here's why. Because in the $9 million of incremental risk expense, that's really a one-time issue on prior claims, okay? A part of it is forward-looking, but the smallest part of it is forward-looking. So the reduction in turnover and the improvements in labor and risk and other areas will offset that, will more than overcome that, and we stand by that margin impact. You know, one of the reasons we reiterated, hey, if you... You know, we just had a year ago commodities, we're already north of 33%, is to show you that with that 100 basis point improvement over a few years, the 34% EBITDA margin visibility is really pretty clear right now. The other thing I would add, Kevin, just to put some numbers around it. When we think about the cost of risk and coming, you know, how it was playing out in 2023 and specifically in Q3, our expectation was that it was a headwind. It was just a greater headwind. So, it ended up being a 90 basis point headwind to reported margins. We had expected it to be a 40-50 basis point. So my point is, that has been a factor throughout 2023, but it is one of those examples of as turnover goes down, the lagging benefits that should accrue to us over 2024 and 2025, potentially, that's one of the items that we'd expect to improve. Oh, that's great color. I'll leave it there. Thank you very much, and best of luck as you close out the year here. Thank you. Our next question today comes from Tobey Sommer with Truist Securities. Please go ahead. Hey, good morning. This is Jasper Bibb for Tobey. Solid waste margins this quarter are obviously quite strong, even with the unexpected costs. Also seems like cost inflation, particularly on the labor side, is moderating a bit, but was hoping to get your preliminary expectations for how we should think about those main unit cost markets tracking into 2024. Sure. So certainly start and welcome Ron's input. You know, we look at a couple of key areas, one being wages. And so wages in 2023, coming into the year, we expected to be in the range of 6%-8%, the increases, same employee increases, starting at 8% and moderating maybe to that 6% or 6.5% over the course of the year. And the update is that's happening. And so we're seeing those improvements in wages particularly. And then I'd say more broadly, as the inflation we're seeing and that we've referred to in that price cost spread, has stepped down over the course of the year from low double digits, from over 10% to now more like 5% or 5.5%. So I'd say the trajectory, first of all, it's playing out as we expected, because the expectation was that, for instance, on the wage front, the outsized increases we put in during the course of 2022, we knew would anniversary over time and not need to be put in at the same level in 2023. So as we continue, that trajectory should continue to moderate. But, you know, I think what we've proven is that being in that 5%-5.5% range, that it should be, you know... We, we expect that's what we would see, and it's playing out largely as expected. ... And I would say, Jasper, that, you know, for 2024, you know, we're seeing, you know, CPI somewhere in that 3%-4% range, is what's being talked about or actually what's coming in now, actually in the low 3% range. I would expect wage increases to be in that 3.5%-4.5% range, you know. So stepping down somewhat, obviously, from the high level of CPI in 2023, but that would be sort of what I would expect from 2024 as we sit today. Thanks. That makes sense. And then some of your peers have discussed project delays on their landfill gas build-out. Just hoping you could give some color on your experience getting these early projects off the ground, and are you seeing any of the timelines move to the right at all there because of permitting or utility issues? Yeah, well, our peers are not alone. You know, the reality is that the utility infrastructure, for the most part in the country, is not quite as ready as perhaps the producers like us are ready. There is significant delays in them getting transmission lines and interconnects ready, and that is pushing projects out, you know, sometimes 6-12 months from expectation. And we are also seeing some supply chain for transformers, generators, and other components that are needed be delayed as well. So, still very good visibility on the projects. Feel very comfortable with our $200 million by 2026, but can some projects move 3-9 months? Yeah, they can, and yes, they are. And we are seeing that as well. That's one of the reasons, as we think about our preliminary thoughts for 2024, the projects coming online, the three that we anticipate by early next year, will be additive to anything we've talked about for 2024. Right. That's super helpful. Thanks for taking the questions. Of course. Thank you. Our next question today comes from Michael Hoffman with Stifel. Please go ahead. Hi, good morning, Ron and Mary Anne. Just to- Morning, Michael Touch on 24, am I in the right neighborhood if I go price 6-8, volumes -2, and the fuel surcharge 0, M&As 2, and that gets you to that sort of 6-8, is that mid- to upper-organic top line? Is that the right way to think about it? You know, clearly, you know, what we've said implies price plus volume, probably mid-single digits, right? To get to the mid to high. Now, it's, is it 6 - 2? Is it, is it 5 and 0? Is it 5.5? You know, there's moving pieces in there, but we expect volumes to continue to be negative, and price needing to be more than that to get to that mid-single-digit range. And Michael, the way I, you know, I think you should think of it, again, probably price in that 6-7 range, volume in that -1 range up to -2, probably starts a little higher, just those comps, and then improves throughout the year. Again, we don't have quite as many acquisitions this year as we did coming out of 2022 into 2023, so there'll be less shedding. So I think you get to the same math, but there's just a little nuance on it. Okay, that helps a lot. And then, Mary Anne, can you tell us what your year-to-date average commodity basket and year-to-date average RIN price is? And then what is the current number, so we can kind of figure out how to roll that into next year? Sure. So, for OCC, we're trending for the full year to about $80 a ton, and that's using Q4 being at current rates, which are closer to $100. And then RINs, for the full year, are trending to about $2.60, assuming Q4 is closer to $3. Okay. All right. That's very helpful. And then, Ron, you've talked about the 34%, getting the whole company back to 34%. Everything I've heard so far, there's nothing that backs you off of that target and somewhere in the, you know, 25, 2020, 2025 time zone. That's correct. Great question. Yeah, I think, you know, and Michael, I have said that we will get there, or believe we will get there. Again, depending on... I've also said that is with sorta 21 level commodities, okay? So with that caveat, but that is also without RNG. Right, which is all tailwind at this point, if we're staying in a $2-$3 range. Are we—what—can you remind us what your 2021 commodity basket was? It was probably right at about. Well, give us one second and we can. We're looking for that information. So we are gonna be, for the year, Mary Anne just said we'll exit the year at a blended 80, Michael. We'll exit the year about- OCC was $150 in- 150. The basket was just a little lower. 2021 was $150, is that what you said? That's right. Yeah. OCC average, $150. Okay. All right. And the last one, yeah, I mean, I get it, your experience on elevated temperatures is, there is none, 'cause it hasn't happened to you. You did mention that this has been something in the modern era of landfill design we've been dealing with. ... and what's the engineering department saying about the long-term outlook here? Does this, do you actually reverse the temperature, or you stabilize it, and therefore, that's how, what you're trying to get your hands around to talk to us about in February? Yeah, no, Michael, you actually reverse the temperature. As you reverse the temperature, which is what we are doing, we've added significant number of wells in this late in the third quarter and so forth through the fourth quarter. We have added over 50 new wells to pump out leachate and gas and reverse the temperature. As the temperature reverses and cools, the reaction stops, and the generation of water stops, and that is the resolution. When it comes down, the leachate management costs, which are, you know, running somewhere $0.10-$0.15 a gallon, so it's a big number. Yeah, they're actually 38 cents a gallon in L.A., because we're trucking it all off to POTW. Because of the magnitude right now, we cannot recirculate. When it comes down, there's a partial of that that we can recirculate during times of the year. But yes, it comes down dramatically, Michael. Okay. Thank you very much. Our next question today comes from Bryan Burgmeier with Citi. Please go ahead. Good morning. Thank you for taking the question. Ron, you may have alluded to this earlier on, I think, Kevin's question, and sorry if I missed this, but, you know, 3Q, even though was essentially in line with your guidance, despite the kind of unexpected landfill costs, you know, is it possible to say what was maybe better than expected that allowed you to get back to your guide? Is it possible to say what would be better? Is that what you said? Yeah, yeah. If you had, you know, $15 million and kind of unexpected landfill costs in the quarter, but you still kind of met your guide, what maybe came in above your expectations that met it out to your guide? Sure. So I'd say, you know, what we say is it's really the execution, the delivery in Q3. And as I described, the margin expansion comes from lots of small improvements within the P&L. And so within solid waste, we did a little better than expected, and then I'd say arguably, we had a little assist from E&P waste, which did step up sequentially in Q3. But it's largely execution. Yeah, and generally, E&P does step down some in Q4, Brian. So you know, that might not be the same assist that it was in Q3. You know, you had a little assist from RINs elevating at the end. So that, you know, right now appears to be holding, but we certainly can't project that to hold. And then you know, you have, as we said, special waste was a little better than we had projected. It was up in the quarter. You know, whether or not that comes through in the fourth quarter because you start to get into the winter weather, you know, that is. So those are things we're not projecting, but and some are weather dependent. Those are the kinds of things that could make that come through. Understood. Thanks for the detail. Last question for me. I'm just wondering if you can provide an update on truck orders. You know, the data and some of the comments from your peers seems pretty positive. You know, do you have a sense for maybe what% of your 2023 orders are going to come in or have come in this year? As we start to look out to 2024, does it seem like backlogs are maybe shrinking or expanding? Yeah, you know, our experience is a little bit different than at least our large public peer. That may be due to their buying power because of their size. But, you know, we are being told and we are planning that we'll get somewhere in the high 80s to almost 90% of our chassis and bodies, therefore, the full units delivered this year. We expect somewhere in that 10%-12% to push or roll into 2024. By the way, that is a little less than what rolled into 2023 from 2022, so in that way, it has improved. But the manufacturers, particularly on the body side, not the chassis side, the chassis side we can get right now, which is opposite of last year. The manufacturers on the body side are still saying there should be some delays through 2024, and it would be normalized in early to mid-2025. That is what we're hearing and experiencing. Got it. Thanks a lot. I'll turn it over. Our next question today comes from Tyler Brown at Raymond James. Please go ahead. Hey, good morning. Hi, good morning, Tyler. Hey, Ron. So I want to come back to turnover. So I think you guys gave some great statistics in the ESG report. You talked about voluntary turnover, I think, in 2022, correct me if I'm wrong, but it was circa 21%. You mentioned, that here in recent quarters you have improved, but can you tell us where that number is today? I think you said it was down 20%. So is it basically already back down to that mid to high teens, kind of where we were pre-COVID? Yeah, it's 7.4% right now. Okay. And so the whole idea here is that leads, but the benefits are a bit lagged. So that's what's really going to help us in 2024 and likely off into 2025? ... Yeah, that's right. You know, our objective is to continue to drive that voluntary down further. You know, our involuntary, meaning us making a proactive decision, will run higher for a little while because we accepted, you know, employees that were probably a little more marginal than we would have otherwise, and maybe a little more risk. And so as voluntary comes down, we'll be more active on the involuntary, and then that will fall too, as we restaff with a little bit more of a higher caliber employee in those. So that's how that will flow. Okay, perfect. And I want to kind of come at the landfill developments here a little bit different way. So typically, how long would it take to rectify a slope failure? And typically, how long does it take to remediate one of these elevated temperature events? I mean, I appreciate maybe you're somewhat new to some of it, but I think I heard you said that the slope event maybe is a 1-2 quarter issue, but the temperature remediation could definitely take longer since it's, you know- Yeah in the landfill. Is that right? Yeah, we'll try to provide you as much clarity as we have and our experience. The slope event, we will have remediated in the quarter, so that will be under 90-day. And when I say remediated and solved, we will have the landfill reopened and the slope stabilized and begin backfilling into a new area. In that way, the event will be contained within the quarter. There will still be waste we have to relocate in the first quarter of next year, but that's not really anything you would see. That's just sort of using lateral airspace, and then we will go up later. That one's relatively simplistic to do. And this was not a large failure. There was no equipment, no personnel, no anything involved. This was, you know, really a side slope failure with waste moving laterally some. It just happened to be near our road, which is one of the reasons we closed the site, on a temporary basis. Okay. The elevated temperature event is a little bit harder to predict right now, Tyler, but here's what I will tell you. We've been monitoring this since March or April of this year as temperatures were rising. We really didn't start seeing any significant generation of additional leachate or odors until really August is when that occurred. So now as we sit here at almost the end of October, we believe that we're just probably about a month away from being at the fulcrum point and starting to come down in some of the certainly at least the odor component. The leachate generation will go on for a while, but I think we will have a lot better clarity in February. You know, these events, these reactions can go on for some period of time. So sort of think of it as, you know, it's going to go on. It takes time for the temperature to come down. As it comes down, the leachate generation comes down. As it comes down, the odor comes down, and it just sort of continues to diminish until it stops. So it's a matter of getting both the leachate and the methane out to slow the reaction fully, because it's, it's an organic reaction. So, but, but it should, you know, sort of peak at some point, we believe, here in the first quarter or early next year. Okay, perfect. And then, Mary Anne, a couple modeling questions. So I may have missed it, but what was the average commodity price in Q3? Q3, OCC average was $88. 88. Perfect. And then I appreciate the margin walk, but was M&A dilutive? I would have thought that Arrowhead would be dilutive, just given all the transportation revenue flowing there. Yes. No, no. So M&A was not dilutive. It came in in line in the aggregate. In the aggregate, yeah. There's a nominal dilution. You are correct on the margin for Arrowhead because of the transportation at this point. As we march forward, that will reverse. Okay, so we should expect some dilution? I would tell you, de minimis. Yes. You know, if it's 10 bips, that, you know, that's probably a fair number. Yep. Okay, perfect. And then what is the revenue contribution in Q4 from M&A, if I could? $50 million. Perfect. Okay. Thank you guys so much. Thanks, Tyler. Thank you. Our next question today comes from Noah Kaye with Oppenheimer. Please go ahead. Hey, good morning. Thanks for taking the questions. So I'm asking to help clarify this for investors, so I just want to make sure we're all clear. Please, can you clarify that the outlook for 2024 is based off of the current FY 2023 guidance, which does not include the $20 million potential impact for 4Q? That's correct. That's consistent with the way we've approached it, yes. All right. Appreciate that. Maybe if you can put some color around the RNG capital outlays. You know, you said $125 million-$150 million for 2024. You had called out previously a total CapEx spend of $200 million through 2026. So A, making sure there's no change there in the total expected spend. B, remind us what you're tracking to spend in 2023, and then maybe confirming the implication that you expect to be most of the way through that spending program exiting next year. Sure. So for 2023, maybe $35 million or $40 million is a way to think about the spend. And so that tells you the vast majority of it is next year in 2024. All right, excellent. Last question. We've gotten this from folks, that the volumes associated with shedding seem higher relative to the level of M&A than perhaps, you know, if you look back four or five years in the past. And wondering if that is a function of just a lot of the legacy contracts in these acquisitions you're doing recently being underpriced for the inflationary environment. Is there something else we should read into? And then really, I guess the question is: At what point in the future would you expect the shedding associated with some of this M&A to start to abate? Yeah. Well, first off, Noah, when you're doing M&A, there's always going to be some level of shedding. So, because when you're acquiring a private company that's... I'm just going to use, it's got $40 million of revenue, they probably have somewhere between $4 million-$8 million that is going to come up in a 1-3-year period that you're probably going to bid to lose or keep at a margin that you want. So, you know, you start doing $200 million, $400 million, $500 million, as we've done per year over the last several years, 2021, 2022, especially, a fairly large year already this year, you know, that's gonna, you're gonna have some of that for a period of time. You know, we are still, believe it or not, we are still right-sizing Progressive. We acquired that in 2016. Several of the larger contracts that we have lost in 2023 came out of Progressive in both Canada and Florida. And they were 10-year agreements that we lived with till expiration, and we bid them to either re-keep them, and make money or happily walk away. And so, you know, obviously, we've only done one Progressive over time. So, and that is a, you know, I would tell you, that type of shedding is effectively probably done from that, that footprint. But, there's going to be some... You know, we think of the negative volume as probably, you know, roughly about three-quarters to a point related to shedding and about up to a point, maybe a little less, for a conscious price-volume trade-off in competitive commercial markets. I mean, that's the way we think of that. And obviously, you know, we have comfortably led the entire sector in 2022 in price, comfortably led it again in 2023 in price, and we're happy to take that price-volume trade-off, as I think you're seeing it show up in the pace of the margin acceleration. Noah, the other observation I would make and offer is that if the observation is, "Hey, it looks like there's more shedding with these recent acquisitions," I'd say, "No, we, we don't see a material difference." I think what's different is that the underlying economy isn't generating more volumes, and so it's more pronounced for ourselves and others in the industry. And so I think it's always going on, but there's generally a base of positive volume to offset it. Yep, that's great context. Thank you both. Thank you. And our next question today comes from Jerry Revich with Goldman Sachs. Please go ahead. Yes. Hi, good morning, everyone. Good morning, Jerry. I'm wondering if, Ron, Mary Anne, I'm wondering if you could just talk about the margin trajectory, you know, in the core business. You know, you folks sequentially posted margins that were a point better than normal seasonality. You know, the guidance, excluding the noise, suggests another 60 basis points improvement versus normal in 4Q. Does that momentum continue into the first quarter, or are we getting caught up on price cost from here, or will you be at the appropriate run rate exiting 4Q? Sure. So I'll start with, you know, keep in mind that Q3 is the seasonally strongest, you know, margin contributor across the industry for ourselves, and so that's important to put it in context to remember that's the starting point that you're going from right now. So I'd say there is normal seasonality, which impacts the degree to which you know, that impacts reported margins. We've also had the changing dynamics of recycled commodities and RINs, which, of course, were the big headwind going into the year, that's waning and becomes a tailwind. So I'd say within that context, are we still encouraged by the trajectory of margins? Yes, and it's for the reasons that we've described, you know, the opportunity for outsized price cost spread. You know, we've pointed to that as a driver of the potential for outsized margin expansion in 2024, and then the follow-on benefits from the improving retention that we've described. So no change in the way we're thinking about those things, and yes, that is positive in terms of the trajectory. And it sounds like the momentum is continuing into the first quarter, just to be clear, Mary Anne, or at least- Yes ... expected to continue. Yeah. Nothing we've seen would depart from that. As I said, those tailwinds on the commodities, for instance, are positive, and we haven't seen any incremental cost pressures, so we're encouraged by the trends. ... Okay, super. And in terms of, you spoke to D3 RINs, just, you know, mathematically, given where pricing is now, that suggests 2024 versus 2023 will be a, you know, about a $50 million tailwind if current spot prices hold, given the supply issues we've been talking about. Anything that would preclude you from realizing that benefit if the spot rate holds? Do you have any contracts in place? And I just want to confirm, if spot prices do hold, it would be additive to the guidance or preliminary outlook that you shared. A couple things. One, whenever we-- the guidance we've given is basically marking to market, commodity values. What we've said is, continued movement in commodities would be upside, along with the new projects coming online. We've already factored in some tailwind from, from RINs as well as recycled commodities. The other comment, Jared, would be, I never think in terms of that spot price, because, as you know, that's not indicative of where you actually sell RINs, even in the current environment. Rather than picking a point like $3.40, I'd say we're probably in that range of $3-$3.25, is the way we've thought about it. Got it. Thank you. And can you just update us on the timing of CapEx related to these projects? What are you expecting in 2024 and 2025 on the projects where you are putting capital to work? Right. So that would be that $125 million-$150 million in CapEx associated with the RNG projects that we said will impact 2024. That, when that's the vast majority of the $200 million in outlays that we'd expect for all those projects to generate that $200 million in EBITDA by 2026. Super. And then, just a clarification, the $200 million, I believe when you had set that target, D3 RIN prices were in the low $2s, correct? Can I get you to fact-check that for me, please? I think what we talked about was a five-year average, and so I think it's north of that. Yeah, it's $250-$270. Okay. Super. Thank you. Thank you. Our next question today comes from Stephanie Moore, Jefferies. Please go ahead. Hi, guys. Appreciate the time. I'll keep it to just one here. You talked a little bit about the volume environment and your own actions of shedding accounts, but could you maybe talk a little bit about the strength in the underlying environment, what you're seeing on both the commercial and residential side? I know you called out specialty being stronger, but that can be kind of volatile, but would love to just get your, your overall view. Thanks. Well, I would tell you overall, Stephanie, that the economy is okay. I wouldn't say it is by any way strong. I would say it's sort of a flattish environment, from a, from a growth standpoint. You have pockets of strength. I wouldn't really say there's too many pockets of weakness, just flatness. And we looked at, you know. So year to date, our new business sales through our sales force activity is 102% of what it was year to date last year. So, better than last year, but, you know, 2%, in terms of, of new sales. So overall, I would say you've seen a little improvement over 2022, but really pretty flat. And I think, you know, you, you saw that in our comments, that in Q3, you know, roll-off pulls were up 1%. You know, pricing per pull was up quite strong, but roll-off pulls were up 1%. So I think that's indicative, with our footprint being as large as it is, I think that's indicative of what's going on in the economy. And it's, it's, you know, sort of appears to be a soft landing scenario. But there's certainly, you know, no underlying real growth in the economy, not at this point. Well, if some of the infrastructure spending occurs the way it is planned to occur in 2024 and 2025, then I think that could certainly accelerate, you know, development. What I'd add to that, Stephanie, is just that that's not a material change from what we've been saying, really, for the past 6 quarters or so. There's just not been a lot of movement. Thank you. Thank you. Thank you. And today's final question comes from Stephanie Yee with JPMorgan. Please go ahead. Hi, good morning. I was wondering if you can give us some color on what you're seeing in the M&A market, just who you're coming up against, is it other strategics or financial players, and how are valuation levels trending? And just any color on where you're doing the acquisitions, maybe the geography or type of business that you've been acquiring. Well, let's start with the last one, the easiest. I mean, the geography is throughout the U.S. and Canada. You know, we've had a little more focus on the West Coast over the last 18 months or so. And of course, we're, you know, we're acquiring our typical solid waste disposal, collection, and transfer type companies. You know, who do we compete with? We obviously compete with, you know, the other public companies, and we certainly compete with some regional private equity-backed companies, and then private mom-and-pop companies executing their own growth strategy. So, you know, as far as valuations, we've seen valuations probably over the last four months or so, probably pull back about a turn to maybe two turns of EBITDA from where they sort of peaked in, I'd say, late 2022. And, you know, we would probably expect that to continue to tighten a little bit as interest rates have continued to rise, and are expected to perhaps have another adjustment or so, and being in a relatively flat economic environment. So, that's, you know, hopefully would be the answer to those questions you had, Stephanie. Yeah, no, that is very helpful. Thank you. You're welcome. I was just one follow-up. Just on the intention for share repurchases. I know you've renewed your issuer bid, but I guess just in terms of how you're thinking about M&A versus share purchases, it sounds like M&A is still, in your view, the best use of capital. Is that correct? Well, that may be changing rapidly, but yes. Yes. No, it's clearly M&A is still our best use of capital on any long-term basis, and how we should create the most value. But we clearly are opportunistic in the share repurchase and will continue to stay opportunistic in that way. Okay. Sounds good. Thank you so much, Ron. Thank you. Ladies and gentlemen, this concludes our question and answer session. I'd like to turn the conference back over to the management team for any closing remarks. Okay, thank you, operator. Well, if there are no further questions, on behalf of our entire management team, we appreciate your listening to and interest in the call today. Mary Anne and Joe Box are available today to answer any direct questions we did not cover, that we are allowed to answer under Regulation FD, Regulation G, and applicable securities laws in Canada. Thank you again. We look forward to seeing you at upcoming investor conferences or hearing from you on our next earnings call. Thank you. Ladies and gentlemen, this concludes today's conference call. We thank you all for attending today's presentation. You may now disconnect your lines and have a wonderful day.