Thank you, Olivia. Good morning, everyone, and thank you for joining us for our third quarter 2024 earnings conference call. With me this morning are Jim Fish, President and Chief Executive Officer; John Morris, Executive Vice President and Chief Operating Officer; and Devina Rankin, Executive Vice President and Chief Financial Officer. You will hear prepared comments from each of them today. Jim will cover high-level financials and provide a strategic update. John will cover an operating overview, and Devina will come into details of the financials. Before we get started, please note that we have filed a Form 8-K that includes the earnings press release and is available on our website at www.wm.com. The Form 8-K, the press release and the schedules of the press release include important information. During the call, you will hear forward-looking statements, which are based on current expectations, projections or opinions about future periods. We'll also be providing an updated outlook for 2024. This outlook does not include transaction and advisory costs incurred in connection with the acquisition of Stericycle nor post-closing financial contributions related to the planned acquisition of Stericycle. All forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially. Some of these risks and uncertainties are discussed in today's press release and in our filings with the SEC including our most recent Form 10-K and Form 10-Qs. John will discuss our results in the areas of yield and volume, which unless stated otherwise, are more specifically references to internal revenue growth or IRG from yield or volume. During the call, Jim, John and Devina will discuss operating EBITDA, which is income from operations before depreciation and amortization. Any comparisons, unless otherwise stated, will be with the prior year, net income, EPS and income from operations and margin, operating EBITDA and margin and SG&A expense and margin results have been adjusted to enhance comparability by excluding certain items that management believes do not reflect our fundamental business performance or results of operations. These adjusted measures, in addition to free cash flow, are non-GAAP measures. Please refer to the earnings press release and tables, which can be found on the company's website at www.wm.com. For reconciliations to the most comparable GAAP measures and additional information about our use of non-GAAP measures and non-GAAP projections. This call is being recorded and will be available 24 hours a day beginning approximately 1:00 P.M. Eastern Time today. To hear a replay of the call, accessed at WM website at www.investor.wm.com. Time-sensitive information provided during today's call, which is occurring on October 29, 2024, may no longer be accurate at the time of a replay. Any redistribution, retransmission or rebroadcast of this call in any form or not the express written consent of WM is prohibited. Now I'll turn the call over to WM's President and CEO, Jim Fish.

Okay. Thanks, Ed, and thank you all for joining us. Our quarterly results once again reflect robust operational performance in our collection and disposal business as well as our success executing on our strategic priorities. We're pleased to report another quarter of double-digit operating EBITDA growth, positioning us well to deliver about $6.5 billion for the full year, near the upper end of our guidance. Our cost optimization efforts and disciplined pricing programs together are increasing the spread between price growth and our cost to serve and our sustainability investments are providing margin accretive growth. As we'd anticipated, the third quarter set a new record for operating EBITDA margin at 30.5%, a year-over-year expansion of 90 basis points. This consistent growth underscores our commitment to delivering exceptional value to our shareholders. We remain focused on furthering our cost optimization efforts in collection and disposal in our collection and disposal business and improving frontline retention. And John will share more about the headway we're making here. Our teams are also hard at work integrating acquisitions in key markets and have closed nearly $800 million of solid waste acquisitions through the first nine months of the year with a strong pipeline of additional deals. We continue to progress towards closing the acquisition of Stericycle, which will add a complementary medical waste platform to our business and expand our suite service offerings. During the quarter, Stericycle shareholders approved the merger agreement. We received clearance from all international regulators, except for Canada, which is progressing. We're also advancing our integration planning, which has confirmed our confidence in the value of the Stericycle acquisition. We look forward to welcoming Stericycle team members to the WM team this quarter. Turning to recycling. During the quarter, we completed eight projects across our network, including six automation upgrades and new facilities in New York and Florida. Our team's focus on execution has been excellent with two of the projects completed in the quarter beginning operations ahead of plan. We've now completed 24 of the 39 projects in the growth program, which have added 1.5 million tons of annual recycling capacity across North America. Our automated recycling facilities are consistently delivering lower labor cost per ton and higher blended value on our commodity sales compared to our legacy plants, which translates into better operating EBITDA margins. In the renewable energy business, we remain on track to commission the four new renewable natural gas projects in the fourth quarter, adding to our DFW plants, which we brought online earlier this year. With these five projects, along with the two we completed prior to 2024, we will have seven of the 20 planned projects online by year-end. There are an additional 12 projects in active construction and the final plant will begin construction in early 2025. The seven projects are expected to contribute approximately 6 million MMBtus of annual production in 2025. Next year, is anticipated to be a pivotal year of contributions from renewable natural gas investments, and we're committed to scaling this unique opportunity to create long-term value for the environment and shareholders alike. We came into this year expecting strong execution across several fronts. And through the first nine months, we've delivered results that exceeded our own high expectations. As we look ahead to 2025, we anticipate continued growth in our solid waste business, increased contributions from our sustainability growth investments and the successful integration of the Stericycle business to come together to create a significant step change in revenue, earnings and free cash flow. I want to thank our dedicated team, whose hard work and commitment make all of this possible. And now, I'll turn the call over to John, who will provide a deeper dive into our operational results for the quarter.

Thanks, Jim, and good morning. Before we dive in our operational performance and financial metrics, I want to take a minute to acknowledge and thank our team for providing safe and reliable service to our customers, especially considering the severe weather events. Hurricanes Helene and Milton have affected both our employees and the communities we serve. We are working hard to support those impacted, helping restore a sense of normalcy in these areas. Turning to our results. We continue to prioritize technology and automation to optimize our cost structure and enhance operational efficiency. This is evident in operating expenses of 60.6% of revenue in the third quarter, which improved 70 basis points and overcame a 30 basis point headwind from additional workdays in the quarter. This is the fourth consecutive quarter this measure has been below 61%. This quarter's result is driven by continued benefits from cost optimization, pricing discipline and easing inflation. We also benefited from lower fuel prices and stronger contributions from our renewable energy business, though these gains were offset by the impact of increased recycled commodity prices on the brokerage business. Our operating expense performance was largely driven by our collection business, in particular, in labor and repair and maintenance costs. Labor costs improved through a combination of retention, technology and automation. We've automated more than 800 routes in our residential fleet since 2022, reducing our labor dependence, boosting efficiency and improving safety performance. The continued adoption of scheduling and planning tools, advanced mapping systems and dynamic routing is also driving efficiency and reducing operating costs. In the third quarter, our weighted average collection efficiency rose by 2%, with the residential line of business increasing more than 4%. Our intentional focus on making WM a great place to build a career is leading to reduced driver and technician turnover, improving about 19% annualized, a significant improvement over last year. Repair and maintenance costs also improved as a percentage of revenue, driven by our ongoing implementation of technology-driven processes and improvements in our truck delivery schedule. Our focus and execution in these areas are leading to strong financial performance as adjusted operating EBITDA in the collection and disposal business grew $181 million in the quarter, with margin expanding to 37.4%. Finally, turning to our revenue growth. Our pricing results continue to track well. Our team continues to leverage customer-specific data and insights to deliver pricing in line with inflation alongside our margin expansion objectives. We are being purposeful in allocating our people and our assets to their best use. This approach is very evident in our residential line of business, where we've intentionally moved away from lower-margin business, while at the same time, significantly improving our safety performance, growing organic revenue and expanding operating EBITDA margin. By maintaining and growing the right volumes, we are driving long-term value and enhancing overall returns. Our volume results have trended consistently to what we saw in the first half of the year with growth from commercial collection, MSW and special waste. It is encouraging to see our key volumes continue to grow, particularly MSW, which was up 5.7% in the quarter. While the roll-off business remained soft, the declines in volume showed sequential improvement. Similar to the residential business, we're making the right volume trade-offs as organic revenue grew in the quarter and operating EBITDA margin expanded. Churn was 9.2% in the quarter, which is similar to last year and validates the effectiveness of our customer lifetime value model. Service increases continue to outpace decreases, further reinforcing our execution. We remain confident that our data-driven business decisions and technology investments are leading to greater operational efficiency and improved return on capital, which is reflected in the growth and margin performance of our collection and disposal operations. In closing, I want to thank the entire WM team again for their contributions. Their performance positions us for a strong year-end finish and sustained growth heading into 2025. And now I'll turn the call over to Devina to discuss our third quarter financial results in further detail.

Thanks, John, and good morning. Our results underscore the effectiveness of our strategy to maximize customer lifetime value and drive operating efficiency. Our success is again evident in the operating EBITDA growth, which was 11% in the quarter and operating EBITDA margin, which reached an all-time high of 30.5%. This result was at the low end of our projection of 30.5% to 31% for the quarter due to higher-than-expected recycling commodity prices. When considering about 20 basis points of margin pressure from higher recycled commodity prices, we see the 90 basis points of margin expansion is a strong result that was right at the middle of our guidance range. This highlights that margin expansion from organic growth and cost optimization met our expectations. Once again, margin expansion was driven by the collection and disposal business. Our disciplined pricing strategy, intentional shedding of low-margin residential volume, improved employee retention benefits from truck deliveries and the use of technology to drive efficiency combined to deliver 140 basis points of margin growth in the third quarter. The 50 basis point offset relates to higher incentive compensation costs. These results have been driven by robust operating and free cash flow growth as well. We generated $3.88 billion of cash from operations through the first nine months of 2024, an increase of more than 16% compared to the same period in 2023. With capital expenditures tracking according to plan across the business and proceeds from the divestiture of non-strategic assets a little ahead of our plan, we've grown free cash flow by 20%. Our outlook for the full year is strong, with operating EBITDA toward the high end of expectations being the driver. Total capital expenditures are expected to be $3.15 billion to $3.25 billion for the year. The increase of about $50 million from our prior guidance relates to continued progress on the development of our sustainability growth investments. Additionally, we continue to expect $145 million of investment tax credits in 2024 from our renewable natural gas projects. Putting all of this together, we're on pace to achieve the high end of our full year free cash flow guidance for the year of $2.15 billion. Our balance sheet remains strong, and we're well-positioned to fund the acquisition of Stericycle. As a reminder, we have suspended our share buyback program because of the current focus on M&A growth including the pending Stericycle acquisition and the nearly $800 million core solid waste acquisitions completed through the end of the third quarter. We remain committed to a disciplined approach to allocating capital, and we prioritize a strong investment-grade credit rating. Organic and inorganic long-term strategic growth and strong shareholder returns through dividends and prudent share repurchases. With three quarters of the year complete, we're confident that we will meet or exceed the high end of our 2024 guidance for revenue and free cash flow. And we will deliver about $6.5 billion of operating EBITDA, representing a growth rate of about 10%. This strong finish to 2024 will create momentum that we expect to carry into our 2025 plan. When you combine our solid waste growth with an increase in earnings contributions from sustainability projects and the expected benefits from adding the Stericycle business to our portfolio, we expect the year ahead to be one of standout performance. Thanks to the efforts of over 48,000 team members across WM who are working hard to deliver on all of our strategic priorities, we're bullish about the future at WM. We want to thank the team for all they do. We look forward to delivering on our targets for 2024 as we close out the remainder of the year. With that, Livia, let's open the line for questions.

And our first question comes from Tyler Brown with Raymond James. Your line is open.

Hi, good morning. So I think back in '23, you guys did call it, $40 million of renewable segment EBITDA, but do you guys still feel comfortable that you'll be run rating somewhere around $300 million in sustainability EBITDA here in Q4? And can you guys give us any color, just big picture on how much incremental EBITDA comes from that segment in '25. I think you guys had mentioned that you would be run rating at maybe $0.5 billion by the end of '25. Does that all still seem good or has that been pushed a little bit to the right?

So I can take this one. This is Tara Hemmer. You'll recall during our last call, $800 million is what we plan to deliver in 2027, and we had pushed that out. If you look at the earnings contribution for 2024 from the sustainability-related businesses, we're expecting that to be in the $120 million to $130 million range for 2024. And you'll recall, we had originally guided $115 million plus another $15 million coming from commodity prices in the recycling business. Related to what we expect to deliver in 2025, what we can tell you really qualitatively is a little bit of the pieces. We certainly expect higher EBITDA growth as these plants come online, not just on the RNG space, but also the recycling space. And we're going to expect lower CapEx in 2025. So when you put those pieces together, you'll expect greater flow-through. The other thing we should mention is we are expecting slightly higher CapEx for the program. Originally, we had said between $2.8 billion and $2.9 billion, and we're now expecting about $3 billion. So all in all, we do expect 2025 to be a significant year for our sustainability-related investments. It's a bit premature for us to give you all the pieces for 2025 based on where things may shake out related to the completion of the plants in Q4 of 2024. And then also, of course, we're tracking closely commodity prices. So we'll give more of an update in early 2025.

And Tyler, with regard to the segment reporting, the one thing I would just clarify is, there's some additional details that we provided in the current press release that will give color to some of the mechanics associated with the collection and disposal business and their contribution to the earnings growth of the sustainability investment portfolio that Tara talked about. And I think it's important to look at those details to see the total picture.

And if you look at those details, what you'll see is year-to-date, we've delivered $92 million EBITDA.

And then Tara, just on the CapEx. So I think if I take the $950 million, and I think you've already spent, call it, 1.4 billion. So you're already, I think, by the end of '24, call it, 2.3. So that implies maybe another $700 million. Is that mostly in 2025, so it steps down in 2025 and then a big step down in 2026? Or is that going to be maybe more pro rata between the two?

Absolutely. You have that right. You have the pieces right.

Okay. Okay. Perfect. And just my last one, Jim. So I know you guys don't give a ton of color on the out year, but you did mention that, again, you're kind of set up for an outsized growth in 2025, and we're in the business of splitting hairs. So I just want to kind of understand exactly what you mean by that. So I think of you guys as a 5% to 7% organic EBITDA grower and then we add something for M&A and renewables. So when you say an outsized grower, is that in context to that 5% to 7% organically? Or are you just simply saying that, that growth can be north of 5% to 7% with Stericycle and renewables? Just any additional color would be super helpful.

Yes. The 5% to 7% growth figure was provided during our 2019 Investor Day, and we have consistently exceeded that organically over the past few years. Our enthusiasm for 2025, 2026, and 2027 stems from several factors. First, regarding our sustainability investments, we estimate around $700 million left in capital expenditures, with most of that occurring next year. Consequently, you should anticipate a significant increase in free cash flow. However, next year's CapEx will still be lower than this year, which is projected to be about $900 million for sustainability investments. In 2026, CapEx will be significantly reduced. At the same time, we expect to see a notable rise in EBITDA. While many plants are set to come online in the fourth quarter, the impact on EBITDA will be delayed until next year when several plants are expected to launch. By 2027, we anticipate reaching $800 million in EBITDA for the first full year. After our 4.5 months of assessment of Stericycle, our excitement has grown, particularly regarding its strategic value. We've gained deeper insights into its core business, which we had previously viewed as a smaller line of business for us. Our initial estimate of $125 million in synergies over three years now appears to be conservative. We will provide more detailed guidance on this in 2025. Notably, we've factored in about $40 million in SG&A synergies from Stericycle in that estimate, reducing their SG&A percentage from 22% of revenue down to 19%. Currently, we're reporting ourselves at 8.9%, fueling our optimism about these synergies. Additionally, John discussed our investments in technology, which we initiated five years ago due to anticipated shortages in certain roles. These technology investments have started to yield results, evident in our consistent reporting of sub-61% operating expenses as a percentage of revenue for four consecutive quarters, driven by our pricing programs and efficiency improvements. Combining these elements, along with ongoing opportunities for tuck-in acquisitions, reflects our strong optimism for 2025, 2026, and 2027, regardless of potential election outcomes or economic fluctuations, unless faced with severe geopolitical issues.

Great color. Thank you.

Thank you. And our next question coming from the line of Toni Kaplan with Morgan Stanley. Your line is open.

Thank you so much. Good morning. Wanted to ask about the revenue guidance raise. I know you don't give guidance quarterly, but 3Q was a little bit stronger than, I guess, what I was expecting. And so was the raise driven by 3Q performance? And why not? Is there anything that leads you to expect the momentum you had in the quarter won't continue into 4Q. It doesn't sound like it. So I just wanted to understand what was going into the thought process there? Thanks.

So you're right that the third quarter was an outsized performance on the revenue line, and that really came from two things. It was recycled commodity prices and landfill volumes. We're optimistic that the landfill volume contribution continues into the fourth quarter. There wasn't anything specific or unusual about that growth. It's some strong market performance in kind of the Midwest part of our company and really good contribution margin from that business. The recycling commodity price piece of it is recycling brokerage contribution and with the port strike impacts that we saw late in the third quarter and some continuing uncertainty associated with those impacts going into fourth quarter. We're less optimistic that you'll see upside to recycling commodity prices continue into the quarter ahead or into 2025 at this point, it's too early for us to say. So really happy with the core business performance and the contributors from collection and disposal specifically, a little more cautious with regard to the recycling commodity price piece. So that is the lower flow-through part of the business, which is why we're still confident in the EBITDA contribution of that revenue growth.

I believe we experienced some offset from reduced electricity pricing that affected our revenue for the quarter. This contributes to our satisfaction with the 7.9% growth in revenue. Looking ahead to 2025, we don't foresee any significant economic challenges. It’s difficult to predict these days, especially during an election year when both sides present their narratives. However, we are not observing any signs of economic trouble and feel the economy is on relatively stable ground.

Yes. That sounds great. I wanted to ask also on an update on the price cost spread and how you're thinking about how that progresses in the next few quarters? Thanks.

Yes, Toni, we're pleased. As I mentioned in my prepared remarks, we are on track with our pricing goals for the year. I want to highlight that the spread indicates CPI has decreased by about 120 basis points for the quarter and 160 basis points year-to-date. When compared to our core price and yield numbers, it reflects positively. The insights from Jim and Devina have certainly impacted our margins. In summary, we are confident in our disciplined approach to pricing, leveraging our customer value lifetime model from a data and analytics perspective. As I noted, the spread continues to be reflected in our operational expenses and margins.

I think, John, we've discussed with Toni the impact of 5,000 to 7,000 jobs not being filled. I mentioned it briefly in response to Tyler's question. We currently have about 2,241 positions since 2022 that we have chosen not to refill, and we estimate that another potential 3,000 jobs will also not be filled. This situation is comparable to being in the fourth or fifth inning in a baseball game, with most of these positions arising through recycling automation and the transition from traditional rear load to automated side load.

Toni, the one final point I might make is while inflation is generally coming down, we're not seeing that with our frontline wages and that's part of the reason why you hear so much conviction about the continued investments in automation and technology, whether it's core business, whether it's recycling facilities, we're still seeing 4.5% to 5.5% on general wage inflation with those frontline roles. In fact, we heard from one of our AVPs during the quarterly reviews that we're hiring technicians, and that number starts with a four now and it's going to start with a five in terms of the rate per hour. So when you look at the investments we're making to try to be a little less labor dependent through attrition, as Jim mentioned, it kind of gives us that much more conviction about those investments.

Terrific. Thanks for the color and congrats on the quarter.

Thank you. And our next question is coming from the line of Jerry Revich with Goldman Sachs. Your line is open.

Hi. Good morning everyone. For those of us New Yorkers on the line, we'll ask for no more baseball analogies, please. So congratulations on the strong results. I just wanted to talk about the returns that we're seeing on recycling investments, is it possible just to get a sense for the savings per plant that we're budgeting in the program? What are we seeing as the plants are coming online. Typically, when you folks make these automation moves. We've seen the results of price on the upside. I'm wondering, is that starting to play out? And how should we be thinking about the per plant economics versus what you folks underwrote at the beginning of the program.

Well, what we can tell you is we're tracking a couple of key metrics. The first and we've said this consistently, the labor cost per ton is really in that 30% improvement range and that is consistent across all of our plants. The other thing that we're seeing is roughly 17% higher blended value on the commodities we sell. We're creating a cleaner product, and this is really important. If you think about the commodity prices that we're at today and we're expecting to end the year around $90 a ton. Our investment thesis was $1.25. So getting a higher blended value on our commodities is very important, and that's been proven out. The other thing that we track is our gross operating expenses, and those are also 17% improvement across the portfolio of automation plants. And then the other point that we don't talk about as much is volume. And we are seeing a volume growth story coming out of these investments, which was a pivotal piece of what we were going to be really offering to the communities that we have these investments in. And Q3 was one of the first quarters where we've seen that volume growth because we've had some impacts related to shutdowns. So we'll see that transfer across each year. So when you stack those together, we're seeing strong margin improvement on our recycling plants across the portfolio.

And that volume, Tara, is really a function of the plant processing faster, correct?

Exactly. So plants processing faster. We're also expanding the size of some of these plants as we're building them. And it's been a great story when we look at one of the markets John is going to be visiting later today in Minneapolis, where we've seen really, really strong volume growth in that market and then also EBITDA performance.

I think it's really important to pull all of that together. Tara outlined all of the contributing factors. When we look at the thing that made us so confident in this investment strategy, it really was the payback period of the recycling investments relative to investments we make in our traditional collection and disposal assets. And we've always talked about the recycling investments being one of the best return on invested capital that we have across our portfolio. And we are seeing that not just hold, but accelerate. So we're really happy to see payback periods in that six to seven year range. And we've got confidence that with some of the outsized performance, particularly on throughput and volume, as Tara outlined, it's actually going to be better than what we had planned when we built the strategy despite the lower commodity price values.

Super. And then in terms of the landfill gas facilities that are coming online, roughly speaking of spot market economics, I think that would imply roughly $150 million to $200 million in incremental EBITDA 2025 versus 2024 from these plants. Anything we should keep in mind in terms of your contracting strategy or any other moving pieces as we think about that 2025 versus 2024 bridge on that part of the investment?

Sure. I'm glad you brought that up because I think there's a tendency to look at the spot market prices for RINs. And just a reminder, we are taking a portfolio-based view of our RNG that we're producing. And one of the things that we outlined was to really work on contracting more of our volume. So today, we are at about 40% for 2025, and we expect to expand that over the balance of Q4 going into early 2025. And that is a mix of long-term offtake in the voluntary market with utilities and also our ability to forward sell 2025 RINs, and we've been able to do that successfully. So that gives us confidence in really any political environment, whether or not Trump or Harris gets elected, we're seeing strong forward selling on 2025 RINs.

It's important to clarify that once our capital expenditures cease and construction is finished, we don’t immediately start generating revenue and EBITDA. There are several subsequent steps that are mostly beyond our control, including the commissioning of the plant, testing of the gas output, and finally, obtaining EPA approval. While we hope these processes are efficient, they involve government factors, which means they don't always proceed as swiftly as we would prefer. We appreciate your team's effort in managing to bring 20 plants online and staying relatively on schedule with our timelines, but it’s essential to acknowledge that there are many steps that follow the construction phase.

Super. And Jim, can I ask you just one last one just to pull the thread on the Stericycle comments that you made earlier on the call. Can you just talk about over the course of diligence, what you folks think about the ability to implement lease management type pricing on that business and the ability to cross-sell. So very interesting to hear about the additional opportunity on the cost side. What do you think based on the diligence on the pricing part of equation?

So as Jim mentioned earlier, all of our diligence and integration planning processes has really spoken to our bullishness with regard to the long-term strategic outlook of this business. With regard to pricing, what I would tell you, Jerry, is this integration planning hasn't been customer oriented. It's been more about bringing the two teams together, bringing our systems and processes together and thinking about how we can use the WM way of using technology to optimize our fleet using technology to optimize the back office in order to reduce the cost of serving in that business. We'll know more once the Stericycle team is part of WM about the runway and projections on revenue growth. But we still think that the overall investment thesis holds because we think that long-term medical waste is one of those parts of the U.S. economy where we're going to see an outsized growth.

Yes, Jerry, Devina mentioned it, but if you take a step back, there are aspects of that business that align well with WM. If you think of it as a fourth collection line, in terms of trucks, maintenance, repair, labor, and efficiency—areas we've discussed over the past couple of years—we believe there are advantages in the future where we can apply those investments and processes to enhance operating improvements.

Thanks very much. So in addition to Stericycle pending, you spent a lot on solid waste M&A this year. Can we talk a little bit about that, the types of businesses you're picking up? And then from a housekeeping standpoint, what the rollover contribution is on revenue for 2025.

Yes, certainly. Yes. So we've had a strong year. We closed almost $800 million of acquisitions. I think on the last call we mentioned that we probably could be in the range of $1 billion. And we still feel good about the pipeline, whether that closes in Q4, it rolls a little bit into Q1 is yet to be determined, but we feel good about the pipeline and the deals that we have teed up. I think important to note, we said this on the last call, there's a handful of markets we mentioned Arizona, the Carolinas, Florida and now the most recent acquisition of Winters Brothers in Long Island. Those are both represent not only good deals for us, but in strategic markets for a host of different reasons. So we feel really good about that. They're all performing very well to date and we're focused on trying to get the next handful of deals closed here in the next few months.

And then, Noah, from a rollover perspective, we see about $150 million of rollover benefit to the revenue line, which we think will translate to about $35 million of EBITDA in 2025.

Hi and thanks for taking my question and congrats on a good Q3 print there. I was wondering if you could maybe provide any more color on the Canadian Competition Bureau review. It looks like it's the last one before you close on Stericycle. You've noted you feel comfortable you'll get that done in Q4 here. But just any color in terms of what they're looking at since they filed this? I think you do overlap on pharmaceutical destruction, but correct me if I'm wrong. Any color there would be helpful?

So I would say it's typical competition reviews in the Canada market, specifically, nothing that concerns us with regard to the pathway to getting to close and I just have to say thank you to all of our team members who have been working really diligently both the legal team and the Canada operations leadership in order to work through these processes. And we're optimistic that we're going to be able to get that clearance here yet in the fourth quarter and move quickly to close.

That's helpful. And my second one here, good progress on these cost initiatives. If I look at your OpEx line items, a lot of them, if I look at it from a perspective, let's say, as a percentage of revenue, a lot of them are kind of back to where they were prior to this inflationary environment. Maybe the one thing that does stand out to me is maintenance and repairs tracking kind of mid- to high 9% as a percentage of revenue. I think we've seen that below 9% prior to the move in inflation. Just wondering if there's an opportunity to move that lower. Is there something structural there that keeps that a little bit more elevated in this new cost environment?

Yes, Kevin, I think that's fair. This quarter showed a 40 basis point improvement in maintenance and repairs. There are two sides to consider: the fleet side and the non-fleet side. On the fleet side, we are benefiting from more consistent truck deliveries than we’ve experienced since pre-COVID, allowing us to plan more strategically for asset management. Regarding residential automation, the configuration of vehicles replacing rear loaders will initially have a higher operational cost, but we evaluate it from both a maintenance and repairs perspective and a total cost of operation per unit. If the efficiency significantly increases, we may accept higher maintenance costs for more advanced technologies if they enhance overall performance, which is reflected in our margins. In the residential segment, I believe we increased by over 300 basis points this quarter despite a 2.9% decrease in volume. Overall, while there are still opportunities in maintenance and repairs, we align that with our total cost of operation goals.

And year-to-date, our maintenance and repairs costs in this environment are flat effectively on a dollar basis. So it's a good indication of getting leverage off of the truck deliveries, and we expect that momentum to continue into the year ahead.

Thank you. If the normalization process for fleet supply chain and employee retention has normally played out. Do you think there's an incremental opportunity for retention to improve further into next year? And I was hoping you could contrast the company's experience with what you're seeing in fleet, supply chain and employee retention and sort of labor expense in the potential acquisition targets that you look at.

Yes, that's a valid point. As I mentioned earlier, we now have a stability in our fleet delivery schedule that we've not experienced in many years, which is greatly benefiting us. This stability not only positively impacts total maintenance and repair costs as a percentage or cost per unit, but also enhances our ability to manage our asset base effectively, ensuring we are optimizing the number of vehicles we have. There is still wage pressure affecting maintenance and repair costs, estimated at around 4.5% to 5.5%, potentially reaching 6% in some markets. We are making the necessary adjustments in response. Currently, our retention rate for drivers and technicians is about 19%, slightly lower for drivers and a bit higher for technicians. Despite these challenges, we are successfully reducing employee turnover, which is a significant advantage for us. Additionally, concerning our recent acquisitions, although these operations have been well-managed, we leverage our WM Way playbook, which allows us to capture more value by integrating the strengths of our supply chain, operational team, and the technology and tools they employ. This remains an area of strong potential for us.

Thanks. What are your thoughts on making additional investments to capture the remaining MMBtus in the company's portfolio, considering that in the short term, there are cash needs related to acquisition-driven growth that might make this not a priority right now?

So we've actively looked at and we have a beat on how much landfill gas that we have that we could really convert into R&D through new investments. And it's important to note the first 20 that we built, they tend to be larger plants where we had more landfill gas. So we're taking a much more prescriptive approach on the next tranche and really evaluating whether or not we should be developing them ourselves or perhaps leveraging a partner for those. That's something we'll likely make a decision on in 2025.

I think it's really important to make a statement about the cash flow generation power of this business. While we're going to see a step change in our leverage with the closing of the Stericycle acquisition, we expect to return to target leverage ratios within 18 to 24 months of closing the transaction. And really, when you step back and look at the fact that before adding Stericycle to WM and before the step change that we're talking about coming in 2027 in free cash flow associated with the sustainability businesses, we're generating over $3 billion annually in free cash flow. And so that indicates our ability to use, call it, $6 billion over a 2-year period in order to meet the dividend and then have substantial free cash flow for the benefit of growth, for the benefit of balance sheet rationalization, it just speaks to the strong fundamentals of this business and our ability to have strategic runway in the sustainability business if we continue to see the return profile of those opportunities present themselves at the highest and best use of our funds.

Great. Thanks and good morning. Just a quick question on the investment tax credits related to a lot of these investments. Our understanding is these are sort of being accrued. Is there any risk to those with the change in administration? Or just kind of if you can highlight the process to getting those paid or just guaranteed? Thanks.

We are not concerned about any risks linked to the change in administration. However, it is a factor to consider, though projecting its impact is challenging. Regarding our accruals, we anticipate $145 million in 2024, which will reflect both a decrease in cash taxes and a reduction in our income statement provision. The potential downside risks we face are primarily related to timing. For instance, if one of our projects were to be delayed into the first quarter of 2025, it could affect our plans. Additionally, there are complexities surrounding the IRA and the domestic content rules. We have assessed these aspects and believe our team is taking the appropriate steps, but the details of tax legislation can be intricate. Therefore, although we feel confident in our actions, the ultimate outcome will depend on interpretation. We have factored this into our guidance, but the final determination will extend beyond the next year as we continue to work with the IRS on our findings.

And just as a reminder, that last part that Devina mentioned, it's the difference between 30% and 40%. And so we're confident we would get the 30%. It's really just the difference between 30% and 40% on ITC.

Great. I appreciate that color. And then just a question as a follow-up to the earlier discussion around base business margin improvement and the offsetting impact from Stericycle. I guess as you get a closer look at the business, would you come back maybe after it closes potentially Q4 reporting and maybe give a path towards how long it may take to get consolidated margins sort of back in positive territory? Or is that something may evolve over a few years? Just trying to get an understanding of how you think about consolidated margins and the journey over the next couple of two to three years or however you look at it? Thanks.

Yes. I believe the last time I checked, their margins were in the 16% to 17% range. As we examine the opportunities for synergies, we haven't yet had the chance to analyze their customer base, so we can't assess the potential for cross-selling or any effects on revenue. However, we do believe we can enhance their current margins due to these factors. It will take us until February to evaluate what Stericycle may look like for 2025 and into 2026 and 2027. Predicting when we can return to approximately 30% margins on a combined basis is challenging. But as mentioned, we do have advantages, including our sustainability initiatives and improvements through technology. John has also discussed several operational enhancements. Therefore, while it's difficult to determine the margin right now, we should be able to provide clearer guidance in February.

Great. Thanks very much for that.

Hi. Good morning. Thank you. One maybe high-level strategic question for me. I appreciate maybe the incremental commentary provided about the updated productivity at your new recycling facilities, whether it's productivity or throughput or the like. Is there any way you could then frame what some of these facilities are doing from a margin standpoint? Obviously, it wouldn't be completely apples-to-apples given allocating corporate costs, but just so we can think about truly what the margin differential is kind of pre and post upgrades? Thank you.

So rather than give you specific margins on the business, what I think is important is that we bring it all together and say from a return on invested capital perspective and a margin expansion perspective, we've effectively seen a 10 percentage point increase in the margin of the business post automation, and that's a really strong indication of the power of the technology. And whether that be top line growth or middle of the P&L management cost reduction, we're seeing the benefits on each part of the model, and that's about a 10 percentage point lift in margin.

Great. That's helpful. And then just one quick follow-up. On OCC pricing expectations for the fourth quarter, what are your underlying assumptions embedded in those?

Our underlying assumptions for our blended commodity basket in Q4 is $85 a ton.

Hi. Good morning, Waste Management. Thanks for fitting me in.

Good morning.

Just one last quick one, I guess, on the commodity side. Now that you've kind of improved the facilities in automation, do you have a sensitivity to commodity price? So if that $85 changes, how should we think about the impact on maybe an annualized EBITDA?

Well, the way to think about it, and we've said this previously, is about 60% of the benefit related to our automation plans is really independent of commodity prices, and that's the labor cost. That's the uplift that we get on blended values because we're producing a higher-quality product. And we're definitely seeing those flow through when we bring these automated plants online. So there's less of a sensitivity to commodity prices, but there still is a sensitivity that exists in the business.

Yes, we've got about 11 more 100 routes that are eligible to be automated. And I would tell you, it's at least two years and probably into the third year before we cycle through all of them. But as I mentioned, I mean, from an efficiency margin safety standpoint, go down the list, we're even though we're trading off a little bit of volume, it's obviously from an investment perspective, been a fantastic effort by the team.

Some of it, John, is a function of the contract itself. It's not necessarily getting the truck, but it's the contract expiration. If you've got a contract that is a three-year contract that is pick up everything contract and you're going to transition to an ASL contract that has to be negotiated by the public sector team and at the end of the existing good project.

Thank you. And I will now turn the call back over to Mr. Jim Fish, President and CEO, for any closing remarks.

Okay. Well, thank you so much for your great questions today. We feel very good about the quarter. We feel very optimistic about the remainder of the year and into 2025, 2026, 2027. We're excited to be in this business at this point. But thank you very much. We will talk to you soon, and talk to you next quarter.

Ladies and gentlemen, that does conclude our conference for today. Thank you for your participation and you may now disconnect.