Waste Connections Inc (WCN) 2023 Q4 法說會逐字稿

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

大家早安，歡迎參加 Waste Connections, Inc. 2023 年第四季財報電話會議。 （操作員說明）也請注意今天的活動正在錄製中。現在，我想請總裁兼執行長 Ron Mittelstaedt 發言。先生，請繼續。

Okay. Thank you, operator, and good morning. I would like to welcome everyone to this conference call to discuss fourth quarter results and our outlook for both the first quarter and full year 2024. I'm joined this morning by Mary Anne Whitney, our CFO and several other members of senior management.

好的。謝謝您，接線員，早安。我歡迎大家參加這次電話會議，討論第四季度業績以及我們對第一季度和2024 年全年的展望。今天早上，我們的首席財務官瑪麗·安妮·惠特尼(Mary Anne Whitney) 和其他幾位高階管理層成員也加入了我的行列。

As noted in our earnings release, adjusted EBITDA margin expansion of 200 basis points in Q4 capped off a remarkable year for Waste Connections, driven by solid execution and continued improvement in operating trends. Solid waste organic growth led by 8.7% core pricing was bolstered by improvements in commodity-driven revenues during the quarter, providing momentum for 2024. Acquisition activity also accelerated into year-end, as we announced the acquisition of the USD225 million revenue E&P waste, disposal-oriented assets of SECURE ENERGY in Western Canada, which has closed as of February 1, bringing expected 2024 revenue contribution from acquisitions to approximately $325 million with incremental dialogue ongoing.

正如我們在財報中所指出的，在穩健的執行力和營運趨勢持續改善的推動下，第四季度調整後的 EBITDA 利潤率擴大了 200 個基點，為 Waste Connections 取得了非凡的一年。本季商品驅動收入的改善推動了固體廢棄物的有機成長，核心定價為8.7%，為2024 年提供了動力。隨著我們宣布收購收入達2.25 億美元的勘探與生產廢棄物，收購活動也在年底加速. SECURE ENERGY 位於加拿大西部的處置型資產已於 2 月 1 日關閉，隨著增量對話的進行，預計 2024 年收購帶來的收入貢獻將達到約 3.25 億加元。

Looking at our differentiated results during the full year 2023, we delivered 70 basis points adjusted EBITDA margin expansion after overcoming 60 basis points in headwinds from recovered commodity values to report an industry-leading margin of 31.5%, double-digit growth in both revenue and adjusted EBITDA from price-led organic solid waste growth and outside acquisition contribution. Along with disciplined execution and focus on the quality of revenue drove adjusted free cash flow of $1.224 billion or 15.3% of revenue, in line with our outlook. Both employee turnover and safety incident rates exited 2023 at multiyear lows, setting up 2024 for continued improvement in trends, along with the opportunity for outsized margin expansion. 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.

綜觀2023 年全年的差異化業績，我們克服了大宗商品價值回升帶來的60 個基點的不利影響，實現了70 個基點的調整後EBITDA 利潤率擴張，實現行業領先的31.5% 利潤率，營收和營收均實現兩位數成長。根據價格主導的有機固體廢棄物成長和外部收購貢獻調整後的 EBITDA。加上嚴格的執行和對收入品質的關注，調整後的自由現金流達到 12.24 億美元，佔收入的 15.3%，與我們的預期一致。 2023 年，員工流動率和安全事故率均處於多年低點，為 2024 年趨勢持續改善做好準備，並有機會實現大幅利潤擴張。在我們詳細介紹之前，請允許我將電話轉給瑪麗安妮，以獲取我們的前瞻性免責聲明和其他內務事項。

Thank you, Ron, and good morning.

謝謝你，羅恩，早安。

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 February 13 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.

今天電話會議的討論包括根據 1995 年美國私人證券訴訟改革法案的安全港條款做出的前瞻性陳述，包括適用的加拿大證券法含義內的前瞻性資訊。由於各種風險和不確定性，實際結果可能與此類前瞻性陳述中的結果有重大差異。我們 2 月 13 日財報中包含的警告聲明以及向美國證券交易委員會和加拿大證券委員會或類似監管機構提交的 Waste Connections 文件中更詳細地討論了可能導致實際結果不同的因素。您不應過度依賴前瞻性陳述，因為可能存在我們目前尚未意識到或我們目前認為不重要的其他風險，這可能對我們的業務產生不利影響。我們不承諾修改或更新任何前瞻性陳述以反映今天之後可能發生變化的事件或情況。

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.

在電話會議上，我們將討論非公認會計原則措施，例如調整後的 EBITDA、調整後歸屬於 Waste Connections 的淨利潤（以美元為基礎和稀釋每股收益）以及調整後的自由現金流。請參閱我們的收益發布，以了解此類非 GAAP 指標與最具可比性 GAAP 指標的對帳情況。管理階層使用某些非公認會計原則衡量標準來評估和監控我們營運的持續財務表現。其他公司可能會以不同的方式計算這些非公認會計準則指標。我現在將把電話轉回給羅恩。

Thank you, Mary Anne. 2023 was a remarkable way -- remarkable year, excuse me, in many ways, and we recognized that there were some unanticipated changes. What didn't change, however, was the dedication and accountability of our local teams who consistently demonstrated their commitment to the customers and communities we have the privilege to serve. Similarly, we renewed our commitment to a decentralized operating philosophy and servant leadership culture, both of which have served to differentiate Waste Connections and drive industry-leading results.

謝謝你，瑪麗安妮。 2023 年是非凡的一年，對不起，在許多方面都是非凡的一年，我們認識到出現了一些意想不到的變化。然而，沒有改變的是我們當地團隊的奉獻精神和責任感，他們始終如一地表現出對我們有幸服務的客戶和社區的承諾。同樣，我們重申了對分散經營理念和僕人式領導文化的承諾，這兩者都有助於使 Waste Connections 脫穎而出並取得業界領先的成果。

As we have indicated, we are extremely pleased with our strong operating and financial performance throughout 2023, most notably driven by momentum in the second half of the year when adjusted EBITDA margins expanded to an average of 32.4%, with Q4 margin expansion of 200 basis points year-over-year. During 2023, employee retention improved by over 20%, with a reduction in open positions of over 40%. Most importantly, we also achieved a reduction of over 7% in safety incident rates with over 60% of our operating locations, showing improvement or zero safety-related incidents during the year. Virtually all of this improvement occurred in Q3 and Q4, providing momentum into 2024.

正如我們所指出的，我們對 2023 年強勁的營運和財務業績感到非常滿意，尤其是受到下半年勢頭的推動，調整後 EBITDA 利潤率平均擴大至 32.4%，第四季度利潤率擴大了 200%點同比。 2023 年，員工留任率提高了 20% 以上，空缺職位減少了 40% 以上。最重要的是，我們 60% 以上的營運地點的安全事故率也降低了 7% 以上，年內安全相關事故有所改善或為零。事實上所有這些改善都發生在第三和第四季度，為 2024 年提供了動力。

We delivered core pricing of 9.5% and expanded margins by 70 basis points to report adjusted EBITDA margin of 31.5% for the full year 2023. Excluding 60 basis points margin drag from lower commodity values underlying margins expanded by 130 basis points during the year, reflecting our focus on revenue quality as well as the impact of abating cost pressures and the improving trends in retention and safety. All of which contributed to the accelerating margin expansion in the second half of 2023.

我們的核心定價為9.5%，利潤率擴大了70 個基點，報告稱2023 年全年調整後EBITDA 利潤率為31.5%。排除商品價值較低造成的60 個基點利潤拖累，年內基礎利潤率擴大了130 個基點，反映出我們關注收入品質、成本壓力減輕的影響以及保留率和安全性的改善趨勢。所有這些都促成了 2023 年下半年利潤率的加速擴張。

Looking ahead, 2024 is set up for continued outsized margin expansion from reduced turnover and the unrealized cost benefits of improving risk along with moderating cost inflation. We delivered adjusted free cash flow of $1.224 billion in '23, converting over 48% of adjusted EBITDA to adjusted free cash flow, in line with the increased outlook we provided in August and more than overcoming unanticipated site-specific closure related impacts at our Chiquita Canyon landfill in Southern California.

展望未來，由於營業額減少以及風險改善和成本通膨放緩帶來的未實現成本效益，利潤率將在 2024 年持續大幅成長。我們在2023 年實現了12.24 億美元的調整後自由現金流，將超過48% 的調整後EBITDA 轉換為調整後自由現金流，這與我們8 月份提供的增長前景一致，並且克服了與奇基塔工廠特定地點關閉相關的意外影響。南加州的峽谷垃圾掩埋場。

Regarding the elevated temperature landfill event or ETLF at Chiquita Canyon that we have described on our last earnings call in October, we are encouraged by our ongoing progress. We continue to work with the community and other stakeholders as we manage the ongoing impacts from the underground reaction occurring in a closed portion of our landfill, including the associated leachate generation.

關於我們在 10 月上次財報電話會議上描述的奇基塔峽谷高溫垃圾掩埋場事件或 ETLF，我們對我們持續取得的進展感到鼓舞。我們繼續與社區和其他利害關係人合作，管理垃圾掩埋場封閉部分地下反應的持續影響，包括相關滲濾液的產生。

As indicated would be the case in the additional disclosure we provided in November, we recorded an increase of approximately $160 million to our landfill closure and post-closure liabilities in Q4 to address and mitigate the ETLF impacts, which are site-specific and nonrecurring in nature.

正如我們在11 月提供的額外披露中所表明的那樣，我們第四季度的垃圾掩埋場關閉和關閉後負債增加了約1.6 億美元，以解決和減輕ETLF 影響，這些影響是特定地點的且不會經常發生。自然。

During 2023, we incurred approximately $21 million in related costs, slightly below our estimates due to the timing of outlays. Based on current engineering estimates and the projected time line, with the expectation for leachate generation rates to peak later this year, the outlays for 2024 are expected to be approximately $75 million. Which is included in our outlook for adjusted free cash flow as Mary Anne will more fully describe.

2023 年，我們產生了約 2,100 萬美元的相關成本，由於支出時間的原因，略低於我們的估計。根據目前的工程估算和預計的時間線，預計滲濾液產生率將在今年稍後達到峰值，2024 年的支出預計約為 7,500 萬美元。這包含在我們對調整後自由現金流的展望中，瑪麗安妮將對此進行更全面的描述。

Looking next at acquisitions. In 2023, we closed over $215 million in annualized revenue from 13 acquisitions with activity across our footprint of franchises and competitive markets, including integrated markets, new market entries and a number of tuck-ins to existing operations. Additionally, on February 1, we closed the previously announced acquisition of SECURE ENERGY's E&P waste disposal oriented asset divestitures in Western Canada. Together with the rollover contribution from deals completed during '23, this already sets up expected 2024 acquisition contribution of over $325 million, with a robust pipeline of solid waste opportunities coming in ensuing quarters.

接下來看收購。 2023 年，我們透過 13 項收購實現了超過 2.15 億美元的年收入，這些收購活動遍及我們的特許經營權和競爭市場，包括綜合市場、新市場進入以及對現有業務的大量整合。此外，2 月 1 日，我們完成了先前宣布的 SECURE ENERGY 加拿大西部 E&P 廢棄物處理導向資產剝離的收購。加上 23 年期間完成的交易的展期貢獻，預計 2024 年的收購貢獻將超過 3.25 億美元，並且在接下來的幾個季度將出現大量固體廢物機會。

On top of SECURE, 2024 is set up for an outsized M&A year in our core solid waste business. Stay tuned for the next few quarters.

除了 SECURE 之外，2024 年也是我們核心固體廢棄物業務的大規模併購年。請繼續關注接下來的幾個季度。

Additionally, we are encouraged by recent movement in the franchise process in New York City, where we have been awarded the right to compete in 12 commercial zones plus citywide compactor service. We look forward to seeing continued progress this year, beginning with a pilot project slated for Q4. As we've noted, recent acquisition activity in the Northeast, including rail access to our Arrowhead landfill in Alabama, has created greater optionality for disposal in many markets and expanded the potentially addressable market for acquisitions for us. That said, there is no change to our disciplined approach to acquisitions, our focus on market selection, the risk profiles we accept and the valuations we determined to be appropriate.

此外，紐約市最近的特許經營進程也讓我們深受鼓舞，我們獲得了在 12 個商業區以及全市壓實機服務領域競爭的權利。我們期待看到今年繼續取得進展，從定於第四季度進行的試點計畫開始。正如我們所指出的，最近在東北部的收購活動，包括通往阿拉巴馬州箭頭垃圾掩埋場的鐵路通道，為許多市場的處置創造了更多選擇，並擴大了我們潛在的收購市場。也就是說，我們嚴格的收購方式、我們對市場選擇的關注、我們接受的風險狀況以及我們確定的適當估值都沒有改變。

Ending 2023 with leverage of approximately 2.6x debt-to-EBITDA, and liquidity of over $1.5 billion, our balance sheet strength and free cash flow profile provide flexibility for continuing elevated levels of investments in our organic solid waste growth story, along with renewable energy projects and solid waste acquisitions while also increasing our return of capital to shareholders.

到2023 年底，債務與EBITDA 的槓桿率約為2.6 倍，流動性超過15 億美元，我們的資產負債表實力和自由現金流狀況為繼續提高有機固體廢物增長故事以及可再生能源的投資水平提供了靈活性項目和固體廢棄物收購，同時也增加了我們對股東的資本回報。

To that end during 2023, we increased our quarterly per share dividend by 11.8% to return over $270 million to shareholders through dividends. And we invested approximately $1.7 billion in capital expenditures and acquisitions to reinvest in our business and position ourselves for future growth.

為此，我們在 2023 年將季度每股股息提高了 11.8%，透過股息向股東返還超過 2.7 億美元。我們投資了約 17 億美元的資本支出和收購，以對我們的業務進行再投資，並為未來的成長做好準備。

And now I would like to pass the call to Mary Anne to review more in depth the financial highlight of the fourth quarter and provide a detailed outlook for Q1 and full year 2024. I will then wrap up before heading into Q&A.

現在，我想將電話轉給瑪麗安妮，讓她更深入地回顧第四季度的財務亮點，並提供第一季和2024 年全年的詳細展望。然後，我將在進入問答環節之前結束發言。

Thank you, Ron. In the fourth quarter, revenue of $2.036 billion was up $166 million or 8.9% Year-over-year bringing full year 2023 revenues to $8.022 billion, in line with our expectations and up 11.2% year-over-year. Acquisitions completed since year ago period contributed about $53 million of revenue in Q4 or about $51 million net of divestitures, bringing full year net acquisition contribution to $407 million. Core pricing in Q4 was 8.7%, and range from about 7% in our mostly exclusive market Western region to between about 8.5% and over 10% in our competitive markets. Fuel and material surcharges were negative 80 basis points in the quarter on lower fuel costs. Solid waste volumes in Q4 were down 2.3%, and continue to reflect our shedding of poor-quality revenues and the nonrenewal of municipal contracts as well as a purposeful trade-off between price and volume in some markets.

謝謝你，羅恩。第四季營收為 20.36 億美元，年增 1.66 億美元，成長 8.9%，使 2023 年全年營收達到 80.22 億美元，符合我們的預期，年增 11.2%。自去年同期以來完成的收購為第四季度貢獻了約 5,300 萬美元的收入，扣除資產剝離後的收入約為 5,100 萬美元，使全年淨收購貢獻達到 4.07 億美元。第四季的核心定價為 8.7%，範圍從我們主要獨家市場西部地區的約 7% 到競爭市場的約 8.5% 至 10% 以上。由於燃料成本下降，本季燃料和材料附加費為負 80 個基點。第四季度的固體廢物量下降了 2.3%，這繼續反映出我們放棄了質量較差的收入和不再續簽市政合同，以及在一些市場上有目的地在價格和數量之間進行權衡。

Additionally, in Q4, they reflect tough comparison to the prior year's hurricane-related activity in Florida, and in Texas, the diversion of waste from our Seabreeze landfill where we impose temporary operating limitations while completing certain repairs. Those diversions concluded at the end of January.

此外，在第四季度，它們與去年佛羅裡達州和德克薩斯州的颶風相關活動進行了嚴格的比較，從我們的Seabreeze 垃圾掩埋場轉移廢物，我們在完成某些維修的同時實施了臨時營運限制。這些改道活動於一月底結束。

Looking at year-over-year results in the fourth quarter on a same-store basis. Roll-off pulls per day were about flat and total landfill tons were down about 1%, with MSW flat, special waste up 2% and C&D weight down 9%, due primarily to last year's hurricane-related volumes, as noted. Adjusting for those impacts in Seabreeze, total tons were up nominally year-over-year.

以同店為基礎查看第四季的年比業績。每天的滾落量基本上持平，垃圾掩埋總量下降約1%，其中都市固體廢棄物持平，特殊廢棄物成長2%，拆建和拆建重量下降9%，這主要是由於去年與颶風相關的數量，如前所述。在調整了 Seabreeze 的影響後，總噸數名義上比去年同期有所增加。

Adjusted EBITDA for Q4, as reconciled in our earnings release, was up 16.4% year-over-year to $656 million or 32.2% of revenue, and included an impact of about $5 million from the waste diversion and repairs at Seabreeze noted earlier. Excluding this 20 basis point impact, our adjusted EBITDA margin was up 220 basis points year-over-year, primarily from underlying solid waste margin expansion.

根據我們的收益發布，第四季度調整後 EBITDA 年成長 16.4%，達到 6.56 億美元，佔營收的 32.2%，其中包括先前提到的 Seabreeze 廢棄物轉移和維修帶來的約 500 萬美元的影響。排除這 20 個基點的影響，我們調整後的 EBITDA 利潤率年增 220 個基點，主要來自固體廢棄物利潤率的擴張。

As Ron noted earlier, our Q4 results reflect an adjustment of approximately $160 million to increase our closure and post-closure liabilities for the expected outlays to address the ETLF impacts at Chiquita Canyon projected primarily during 2023 to 2025. Therefore, while there was no impact to adjusted EBITDA, our 2023 adjusted free cash flow reflects outlays for site-specific operating and capital outlays to address the ETLF impacts totaling over $21 million. In spite of those incremental outlays, our adjusted free cash flow of $1.224 billion or 15.3% of revenue was in line with our expectations for the year and reflects 48% conversion of adjusted EBITDA.

正如Ron 先前指出的，我們第四季度的業績反映了約1.6 億美元的調整，以增加我們的關閉和關閉後負債的預期支出，以解決預計主要在2023 年至2025 年期間對奇基塔峽谷的ETLF 影響。因此，雖然沒有影響就調整後的 EBITDA 而言，我們 2023 年調整後的自由現金流反映了為解決 ETLF 影響而進行的特定地點運營支出和資本支出，總額超過 2100 萬美元。儘管有這些增量支出，我們調整後的自由現金流為 12.24 億美元，佔收入的 15.3%，符合我們今年的預期，反映了調整後 EBITDA 的 48% 轉換率。

Capital expenditures of $934 million reflect a similar amount of fleet purchases slipping to '24 as we saw in the prior year. Additionally, they include about $40 million associated with renewable natural gas or RNG facilities under development.

9.34 億美元的資本支出反映了與我們去年看到的類似數量下滑至 24 年的機隊採購量。此外，其中還包括與正在開發的可再生天然氣或RNG設施相關的約4000萬美元。

As discussed on prior calls, our sustainability-related projects include about a dozen RNG facilities, strategic investments with a variety of ownership structures, aggregate capital outlays through 2025 of approximately $200 million are expected to generate an estimated $200 million of incremental EBITDA by 2026 or about $1 of EBITDA per dollar of CapEx. The outlays for RNG projects step up in 2024 to approximately $150 million, which has been factored into our 2024 outlook which I will now review along with our outlook for Q1 2024.

如同先前電話會議所討論的，我們與永續發展相關的項目包括大約十幾個RNG 設施、具有各種所有權結構的策略投資，到2025 年的總資本支出約為2 億美元，預計到2026年將產生估計2 億美元的增量EBITDA 或每 1 美元的資本支出可帶來約 1 美元的 EBITDA。 RNG 計畫的支出將在 2024 年增加至約 1.5 億美元，這已納入我們的 2024 年展望中，我現在將與 2024 年第一季的展望一起回顧該展望。

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 change in the current economic environment. 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.

在此之前，我們想再次提醒大家，實際結果可能會根據我們的安全港聲明以及我們向美國證券交易委員會和證券委員會或加拿大類似監管機構提交的文件中概述的風險和不確定性而存在很大差異。我們鼓勵投資者仔細審查這些因素。我們的前景假設當前經濟環境沒有改變。它還排除了可能在今年剩餘時間內完成的額外收購以及在此期間交易相關項目費用的任何影響。

Looking first at the full year 2024. Revenue in 2024 is estimated to increase by over 9% to $8.75 billion. For solid waste, we expect price plus volume of approximately 4.5% to 5.5%, driven by pricing of 6% to 7% on core pricing of about 7%. About $325 million of estimated revenue in 2024 is from acquisitions closed to date and commodity-driven revenues reflect values in line with recent levels, plus nominal contribution from RNG facilities expect to come online during 2024.

首先看 2024 年全年。2024 年營收預計將成長 9% 以上，達到 87.5 億美元。對於固體廢棄物，我們預計價格加量約為 4.5% 至 5.5%，這是由於定價為 6% 至 7%，而核心定價約為 7%。 2024 年預計收入約 3.25 億美元來自迄今已完成的收購，大宗商品驅動的收入反映了與近期水準一致的價值，再加上預計將在 2024 年上線的 RNG 設施的名義貢獻。

Adjusted EBITDA in 2024, as reconciled in our earnings release, is expected at approximately $2.86 billion or adjusted EBITDA margin of 32.7%, up 120 basis points year-over-year. Continued moderation in inflationary trends, additional acquisitions closed during the year or increases in the values for recovered commodities or in E&P waste activity would provide upside to our 2024 outlook. Depreciation and amortization expense in 2024 is estimated to be about 12.8% of revenue including amortization of intangibles of about $172 million or $0.49 per diluted share net of taxes.

根據我們的財報，預計 2024 年調整後 EBITDA 約為 28.6 億美元，調整後 EBITDA 利潤率為 32.7%，年成長 120 個基點。通膨趨勢持續緩和、年內完成的額外收購、回收商品或勘探與生產廢棄物活動價值的增加將為我們 2024 年的前景帶來上行空間。 2024 年的折舊和攤銷費用預計約佔收入的 12.8%，其中包括約 1.72 億美元的無形資產攤銷，即稅後每股稀釋每股 0.49 美元。

Interest expense in 2024 is estimated at approximately $280 million, and our effective tax rate for 2024 is expected in the range of 23% to 23.5% with some quarter-to-quarter variability. Adjusted free cash flow in 2024 as reconciled in our earnings release, is expected at approximately $1.2 billion on CapEx of approximately $1.15 billion, including base CapEx of $1 billion plus $150 million for RNG project development.

2024 年的利息支出預計約為 2.8 億美元，2024 年的有效稅率預計在 23% 至 23.5% 範圍內，季度與季度之間存在一定的變化。根據我們的收益發布，2024 年調整後的自由現金流預計約為 12 億美元，資本支出約為 11.5 億美元，包括 10 億美元的基本資本支出加上用於 RNG 項目開發的 1.5 億美元。

As Ron noted earlier, our adjusted free cash flow outlook also reflects $75 million for outlays associated with the Chiquita Canyon ETLF. Normalizing for the outlays for Chiquita and the RNG facilities, 2024 adjusted free cash flow of $1.425 billion reflects conversion of EBITDA of approximately 50%. This level is consistent with longer-term trends and in line with our expectations for underlying growth in 2025. When we anticipate outlays for both RNG facilities and Chiquita closure will decline by $170 million.

正如 Ron 先前指出的，我們調整後的自由現金流前景也反映了與 Chiquita Canyon ETLF 相關的 7,500 萬美元支出。在將 Chiquita 和 RNG 設施的支出正常化後，2024 年調整後的自由現金流為 14.25 億美元，反映出 EBITDA 轉換率約為 50%。這一水平符合長期趨勢，也符合我們對 2025 年潛在成長的預期。屆時，我們預計 RNG 設施和 Chiquita 關閉的支出將減少 1.7 億美元。

Incremental tax credits for RNG are not factored into our outlook and would, therefore, be additive. Similarly, any restoration of bonus depreciation benefits on a retroactive or prospective basis, including to a tax bill currently under consideration would be additive to the outlook we have provided.

RNG 的增量稅收抵免並未納入我們的前景，因此將是累加性的。同樣，任何追溯或前瞻性基礎上紅利折舊福利的恢復，包括目前正在考慮的稅單，都將增加我們提供的前景。

Turning now to our outlook for Q1 2024. Revenue in Q1 is estimated to be approximately $2.05 billion on expected solid waste price plus volume growth of 3.5%, driven by pricing of about 7%. Volume expectations reflect about 1% in incremental temporary volume losses associated with the widespread weather-driven closures during January across many markets, particularly on the West Coast. Adjusted EBITDA in Q1 is estimated to be up 140 basis points year-over-year to 31.2% of revenue or approximately $640 million.

現在轉向我們對 2024 年第一季的展望。預計第一季的營收約為 20.5 億美元，預計固體廢棄物價格加上數量將增加 3.5%，而定價約為 7%。成交量預期反映了 1 月份許多市場（尤其是西海岸）因天氣原因大規模關閉而導致的增量臨時成交量損失約 1%。第一季調整後 EBITDA 預計將年增 140 個基點，佔營收的 31.2%，約 6.4 億美元。

Depreciation and amortization expense for the first quarter is estimated to be about 12.8% of revenue, including amortization of intangibles of about $40 million or about $0.11 per diluted share net of taxes. Interest expense in Q1 net of interest income is estimated at approximately $76 million and the tax rate for the first quarter is estimated at about 23%. And now let me turn the call back over to Ron for some final remarks before Q&A.

第一季的折舊和攤銷費用預計約佔收入的 12.8%，其中包括約 4,000 萬美元的無形資產攤銷，或稅後每股攤薄後每股約 0.11 美元的攤銷。第一季扣除利息收入後的利息支出估計約為 7,600 萬美元，第一季的稅率估計約為 23%。現在讓我把電話轉回給羅恩，讓他在問答之前做一些最後的評論。

Thank you, Mary Anne. We're extremely pleased by our 2023 results and our positioning for outsized growth in 2024. With 120 basis points of adjusted EBITDA margin expansion expected as a minimum, along with upside from continued improvement in recovered commodity values or inflationary pressures as well as any additional activity. We're well on our way towards exceeding the near-term 34% EBITDA target we've discussed widely.

謝謝你，瑪麗安妮。我們對 2023 年的業績以及對 2024 年超額增長的定位感到非常滿意。調整後 EBITDA 利潤率預計至少增長 120 個基點，同時商品價值復甦或通膨壓力以及任何額外的持續改善帶來的好處活動。我們正在努力超越我們廣泛討論過的 34% EBITDA 近期目標。

2023 was a year of renewal for Waste Connections. With a return to our leadership routes to reinforce our decentralized operating model, supported by a servant leadership-driven culture. We doubled down on human capital getting back to the basics that are fundamental to implementing the differentiated strategy has driven our exemplary track record of value creation for 26 years. We entered 2024 with continued momentum and well positioned for outsized growth, along with a renewed commitment to sustaining the model that has set us apart.

2023 年是廢棄物連接更新的一年。回歸我們的領導路線，在僕人式領導驅動文化的支持下，強化我們的去中心化運作模式。我們在人力資本上加倍努力，回歸到實施差異化策略的根本基礎，這推動了我們 26 年來創造價值的典範記錄。進入 2024 年，我們保持著持續的動力，並為超額成長做好了準備，並重新致力於維持使我們脫穎而出的模式。

At Waste Connections, we recognize the importance of both relationships and results. Moreover, we believe that not only are they both achievable, but they are necessarily interrelated. We're proud of our results and applaud the local teams who embody the enduring operating values of the company. I want to conclude by thanking our 23,000 employees who work tirelessly to make us better every day. In addition, I'd like to officially welcome the approximately 300 employees who are now part of our R360 Canada team who previously were with SECURE ENERGY. We also appreciate your time today, and I will now turn this call over to the operator to open up the lines for your questions. Operator?

在廢物連接，我們認識到關係和結果的重要性。此外，我們相信，它們不僅都是可以實現的，而且必然是相互關聯的。我們對我們的成果感到自豪，並對體現公司持久營運價值觀的當地團隊表示讚賞。最後，我要感謝我們的 23,000 名員工，他們孜孜不倦地工作，讓我們每天都變得更好。此外，我要正式歡迎大約 300 名員工，他們現在加入了我們的 R360 加拿大團隊，他們以前曾在 SECURE ENERGY 工作。我們也感謝您今天抽出時間，我現在將把這個電話轉給接線員，以便為您解答問題。操作員？

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

女士們、先生們，現在我們將開始問答環節。 （操作員說明）今天我們的第一個問題來自雷蒙德詹姆斯的泰勒布朗。

Margins here, both in Q4 and the outlook are quite strong. I was just hoping if you could maybe walk us through the 200 basis point improvement for Q4. Maybe walk through the expected improvement for 2024 as well? Just kind of what some of those key pieces are?

第四季和前景的利潤率都相當強勁。我只是希望您能帶領我們了解第四季 200 個基點的改進。也許還可以介紹一下 2024 年的預期改進？其中一些關鍵部分是什麼？

Sure. Happy to do. So as I said in the prepared remarks, Q4 was primarily the underlying solid waste business. The way to think about it is about 75% of the improvement was there and the balance in hierarchy would be recycled commodities and then RINs and then a nominal contribution from E&P with a small offset from M&A. So that's Q4. And then looking at the full year, as we said, there are three factors that would drive the opportunity for outsized margin expansion. The first one being the underlying business and the opportunity for outsized price cost spread and improving retention.

當然。很高興做。正如我在準備好的發言中所說，第四季主要是基礎固體廢棄物業務。思考這個問題的方法是，大約 75% 的改進已經存在，層次結構中的平衡將是回收商品，然後是 RIN，然後是勘探與生產的名義貢獻，以及併購的少量抵消。這就是第四季。然後看看全年，正如我們所說，有三個因素將推動利潤率大幅擴張的機會。第一個是基礎業務以及巨大的價格成本差異和提高保留率的機會。

And so about half of the 120 basis point margin expansion would be driven by the underlying business. And then the two other pieces would be the accretive benefit of acquisitions with the addition of SECURE. So if you think 30 to 40 basis points, including SECURE and the other acquisitions, which have that mildly diluted impact and then the balance being the tailwind, term cycle commodities and RINs, which would be the smallest piece, but in the order of, say, 20 to 30 basis points.

因此，120 個基點的利潤率擴張中約有一半將由基礎業務推動。然後，另外兩個部分將是透過添加 SECURE 進行收購的增值收益。因此，如果你考慮 30 到 40 個基點，包括 SECURE 和其他收購，這些收購具有輕微稀釋的影響，然後餘額是順風、期限週期商品和 RIN，這將是最小的部分，但按順序排列，比如說20到30個基點。

Okay. And then Ron, I appreciate the update on turnover and safety. So in that core improvement in '24, are you assuming that, that turnover and safety remunerates the margins? It sounds like, yes. Because I think you said last quarter, it takes a few months for that to kind of show up in the margins. I just want to be clear if that is in the expectation or not.

好的。然後羅恩，我很欣賞有關營業額和安全性的最新消息。那麼，在 24 年的核心改善中，您是否認為營業額和安全性會帶來利潤？聽起來是的。因為我認為您在上個季度說過，需要幾個月的時間才能在利潤中體現出來。我只是想弄清楚這是否在預期之內。

Yes. So we've got to separate them a little bit, Tyler. So I would say that certainly, turnover at this point is impacting our cost structure, and we're starting to see favorably impacting our cost structure. And we're starting to see some of the costs come out of the 100 basis points we've talked about in areas of labor, variable, other operating, et cetera. There is a lag effect on seeing the cost benefit from the risk reductions. So that actually is not factored into '24. So as we continue to have risk reductions, we will get that benefit as we come through '24 into '25 but that is not in the '24 guidance. So this margin improvement is without seeing the benefit of that risk in the actuarial tables at this point.

是的。所以我們必須把它們分開一點，泰勒。所以我想說，目前的營業額肯定會影響我們的成本結構，我們開始看到它對我們的成本結構產生有利的影響。我們開始看到一些成本來自我們所討論的 100 個基點，涉及勞動力​​、可變因素、其他營運等領域。從風險降低中看到成本效益存在滯後效應。所以這實際上沒有被計入'24。因此，隨著我們繼續降低風險，我們將在「24」進入「25」時獲得這種好處，但這不在「24」指導中。因此，目前精算表中並未看到該風險的收益，因此利潤率有所提高。

Excellent. Okay. That is very helpful. And then I know that there is a lot moving around in free cash flow. That is very clear. Mary Anne, did you say that in '23, you spent $40 million on RNG. So if I add that to the $150 million that would imply that maybe your RNG spend next year will drop to something like $10 million and then maybe to zero in '26.

出色的。好的。這非常有幫助。然後我知道自由現金流有很多變動。這是非常清楚的。瑪麗安妮，你說過23年你在RNG上花了4000萬美元嗎？因此，如果我將其添加到 1.5 億美元中，則意味著明年您的 RNG 支出可能會下降到 1000 萬美元左右，然後可能在 26 年為零。

That's right, yes. And that's why the point I made the $170 million reduction between the two pieces where Chiquita steps down and the RNG steps down.

沒錯，是的。這就是為什麼我在 Chiquita 下台和 RNG 下台這兩個部分之間減少了 1.7 億美元。

Okay. And then my last one here. So it sounds like there's a nominal EBITDA contribution from RNG in '24. But how will that schedule look in '25 and '26. And then, Ron, sorry, just to be clear, when you talk about 34%, is that 34% margins, does that include any benefit from RNG?

好的。然後是我在這裡的最後一個。所以聽起來 RNG 在 24 年名義上貢獻了 EBITDA。但 25 年和 26 年的賽程表會是什麼樣子呢？然後，Ron，抱歉，澄清一下，當你談到 34% 時，這 34% 的利潤率是否包括 RNG 帶來的任何好處？

Okay. So let's tackle the first part of your question first. Let's start with '26. We said that for full year '26, we would achieve $200 million of EBITDA on $200 million of CapEx investment for RNG. A very nominal amount of that contribution, as you've noted, we only outlayed $40 million in '23 in RNG. So a nominal amount of that will contribute in '24. Use a number of $15 million, $20 million of EBITDA for '24. That will obviously, with the CapEx spend in '24, that will ramp some in '25, and you'll start to see some more contribution. But the bulk of that doesn't come online until the end of the third quarter or so in '25. That's why the largest amount is -- why the full amount is in '26.

好的。因此，讓我們先解決您問題的第一部分。讓我們從26年開始。我們表示，26 年全年，我們將為 RNG 投資 2 億美元的資本支出，實現 2 億美元的 EBITDA。正如您所指出的，這筆貢獻的金額非常小，我們在 23 年僅在 RNG 上花費了 4000 萬美元。因此，24 年將有像徵性的貢獻。使用 24 年 1500 萬美元、2000 萬美元的 EBITDA。顯然，隨著 24 年的資本支出支出，這將在 25 年增加一些，並且您將開始看到更多的貢獻。但其中大部分要到 25 年第三季末左右才會上線。這就是為什麼最大的金額是——為什麼全部金額是在 26 年。

We also are going to be somewhat cautious in guiding RNG as you are seeing across the board, you have to build headroom in these projects. These local utilities are extremely backed up. There are still supply chain issues for things like transformers, generators, et cetera, that they need. And they give us a commitment of X, and 4 to 6 months later, we're still talking about a hookup. So you have to build a little headroom in there. So that's why I feel comfortable telling you full contribution by '26 in with some more amount coming in '25, then, of course, the $20 million or so in '24. So that's a long way around the bend to say very little to no RNG contribution in that 34%. That's why we've said there are multiple ways to get there, and none of them had RNG in it.

我們也會在指導 RNG 方面保持一定的謹慎，正如你們所看到的那樣，你們必須在這些項目中建立空間。這些當地公用事業得到了極大的支持。他們所需的變壓器、發電機等仍存在供應鏈問題。他們給了我們 X 的承諾，四到六個月後，我們仍在談論聯播。所以你必須在那裡留一點淨空。因此，我很樂意告訴您，到 26 年將全額捐款，25 年將提供更多金額，當然，24 年將提供約 2000 萬美元。所以說 RNG 在這 34% 的貢獻很少甚至沒有貢獻，這還有很長的路要走。這就是為什麼我們說有多種方法可以實現這一目標，但其中沒有一個包含 RNG。

Our next question comes from Toni Kaplan from Morgan Stanley.

我們的下一個問題來自摩根士丹利的東尼卡普蘭。

Pricing this quarter continue to be strong and you'll lock in most of it by April, and you'll have cost inflation moderating. So as we look at margins through the year, should we look at it more as sort of better -- well, I guess, one each is probably also helped by the safety and turnover benefits that you've been seeing. But like basically, you'll also see that inflation coming down through the end of the year. So I guess in terms of just trajectory of margins, what are your thoughts on that?

本季的定價持續強勁，到四月您將鎖定大部分定價，成本通膨將會放緩。因此，當我們審視這一年的利潤率時，我們是否應該更多地將其視為更好的——嗯，我想，您所看到的安全性和營業額效益也可能對每個人都有幫助。但基本上，你也會看到通膨在年底前下降。所以我想就利潤率的軌跡而言，您對此有何看法？

Sure. So the way to think about it, Toni, is pretty similar margin expansion over the course of the year. We've already given you Q1 at 140 basis points. We give you 120 for the full year. But if you modeled in somewhere around 120 for each quarter, a little less, obviously, in one quarter, since we've given you a little more in one. It's the right way to think about it because just to the point you raised, you have a couple of different factors driving it, some of which will lag and some of which we'll get in the first half of the year, for instance, the tail from commodities is greater early than it will be later. But the ability to realize some of those savings and benefits from turnover, for instance, might be further backloaded. And so that's why I think about it as consistent margin expansion over the course of the year.

當然。因此，托尼，思考這個問題的方式與這一年的利潤率擴張非常相似。我們已經為您提供了 140 個基點的第一季利率。我們全年為您提供 120。但是，如果您每個季度都在 120 左右進行建模，那麼很明顯，在一個季度中會少一點，因為我們在一個季度中為您提供了多一點。這是正確的思考方式，因為就你提出的觀點而言，有幾個不同的因素推動著它，其中一些因素會滯後，而另一些因素我們將在今年上半年得到，例如，大宗商品的尾部早期比後期更大。但例如，實現部分節省和從營業額中獲益的能力可能會進一步推遲。這就是為什麼我認為這一年利潤率持續擴張。

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

完美的。然後我想當你想到你一直在做的勞動力流動計劃時，你提到了多年來最低的流動率。當您考慮利率持續上漲時，您是否從市場狀況中受益？還是您去年採取的舉措，還是兩者的結合，只是試圖實現勞動力流動水準的可持續性？

Yes. Sure, Toni. Well, so let's start with a little bit of cadence. So coming out of '22, we experienced total turnover of -- in the low 30s, which was a high for us forever. As we came through into Q2 of '23, that number dropped to about 30%, and as we came through the end of the year, that number dropped to about 27%. These are total turnover numbers and the voluntary turnover number reduced to about 17%.

是的。當然，托尼。好吧，讓我們從一點節奏開始。因此，從 22 世紀開始，我們的總營業額在 30 多歲左右，這對我們來說是永遠的高點。當我們進入 23 年第二季時，這個數字下降到了 30% 左右，而到了年底，這個數字下降到了 27% 左右。這些是總離職人數，自願離職人數減少至 17% 左右。

I would tell you that the up through probably midyear, most of the help was the labor market improvement and sort of the second half of the year, particularly the end of the third quarter and the fourth quarter, the programs and changes we've made were the incremental part. So I would call it sort of 50-50.

我想告訴你，從可能到年中，大部分的幫助是勞動力市場的改善，以及下半年的情況，特別是第三季度末和第四季度，我們所做的計劃和改變是增量部分。所以我稱之為 50-50。

Now as we go through '24 and we plan to drive this number from 27% down to, say, 22% or below as we sit here from a year from now, that will be 100% driven by what we are doing. And so we have made significant changes in how we recruit. We've made significant changes in how we onboard. We've made significant changes in sort of the first year experience of an employee, supervisor development. There's a whole litany of changes that we have made to improve voluntary turnover. We are always going to want to have about 10% to 12% in voluntary turnover. That means we are being proactive on people who might not be the best fit, particularly with regard to safety.

現在，隨著我們進入 24 年，我們計劃從一年後將這個數字從 27% 降低到 22% 或更低，這將 100% 由我們正在做的事情推動。因此，我們對招募方式做出了重大改變。我們對入職方式做出了重大改變。我們對員工、主管發展的第一年經驗做出了重大改變。為了提高自願流動率，我們做了一系列的改變。我們總是希望有大約 10% 到 12% 的自願流動率。這意味著我們正在積極主動地招募那些可能不是最合適的人，特別是在安全方面。

So to get to that 20%, 22% number, over the next year or so. It's telling you that voluntary turnover will get down to 10% to 12%. And we feel very confident in achieving that number. We've been there before. But definitely, we still have some work to do.

因此，要在未來一年左右達到 20%、22% 的數字。它告訴你自願離職率將下降到 10% 到 12%。我們對實現這個數字非常有信心。我們以前去過那裡。但毫無疑問，我們還有一些工作要做。

Our next question comes from Jerry Revich from Goldman Sachs.

我們的下一個問題來自高盛的傑瑞·雷維奇。

This is Adam on for Jerry today. I believe Q1 margin guidance of 31.2% translates to margins down 100 basis points sequentially. If we just look at normal seasonality based off recent historical averages, it's usually around 9 basis points sequentially, Q1 versus 4Q. Can you just help us understand the puts and takes versus normal seasonality in Q1? I know weather was one item mentioned.

今天是亞當替傑瑞發言。我認為第一季 31.2% 的利潤率指導值意味著利潤率比上一季下降 100 個基點。如果我們僅根據最近的歷史平均值來觀察正常季節性，則第一季與第四季相比通常約為 9 個基點。您能否幫助我們了解第一季的看跌期權和看跌期權與正常季節性的比較？我知道天氣是其中提到的一項。

I'd say that's where I would start. There are always idiosyncratic factors that drive the comparability across quarters. And also, just keep in mind this is guidance as opposed to what we've reported. And so it's always a little more difficult to get granular to tell you what the specific drivers are. But weather is a factor, as we said, it's contributing to outsized negative volumes in the quarter. And so I would start there. And just that's one consideration that would drive that difference.

我想說這就是我要開始的地方。總有一些特殊因素會推動季度之間的可比性。另外，請記住，這是指導意見，而不是我們報告的內容。因此，要詳細地告訴您具體的驅動因素是什麼總是有點困難。但正如我們所說，天氣是一個因素，它導致了本季銷量大幅下降。所以我會從這裡開始。這就是導致這種差異的一個考慮因素。

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

好的。偉大的。我只是想知道我們是否可以從這裡進一步深入了解併購管道，特別是東北地區的機會有多活躍？考慮今年併購的潛在配置的好方法是什麼？

Well, Adam, we never comment on anything that's not done or completed or provide any specifics on what's in our pipeline. And we don't have an allocation to M&A. We sort of have an unlimited finance capacity for M&A that meets our strategic and our financial guidelines. A historical strong year is $150 million to $200 million of acquired revenue. We've already done SECURE, and that's $225 million. And in my comments, I said on top of that, you can assume an outsized year on top of that. So it sort of implies that we would do comfortably $150 million to $200 million in acquired revenue minimally on top of SECURE. So that -- I think you can figure out from there what in your mind what an allocation would be based on historical valuations, et cetera.

好吧，亞當，我們從不對任何未完成或未完成的事情發表評論，也不會提供任何有關我們管道中的內容的細節。我們沒有對併購進行分配。我們擁有無限的併購融資能力，符合我們的策略和財務準則。歷史性的強勁年份為 1.5 億至 2 億美元的收購收入。我們已經完成了 SECURE，投資額為 2.25 億美元。在我的評論中，我說除此之外，你可以假設這是一個巨大的一年。因此，這有點意味著，除了安全之外，我們至少可以輕鬆獲得 1.5 億至 2 億美元的收入。因此，我認為您可以從那裡弄清楚您認為基於歷史估值等的分配是什麼。

Our next question comes from Noah Kaye from Oppenheimer.

我們的下一個問題來自奧本海默的諾亞·凱伊。

On the New York commercial zoning strikes home for me literally since I'm in the first pilot zone. So as you move through that, I think you commented during prepared remarks that plus the rail acquisition seems to be expanding your addressable market opportunity in and around the Northeast. I wonder if you could just expand on that a little bit. Take us through in more detail how both of those moving pieces increase your addressable opportunity?

自從我身處第一個試驗區以來，紐約的商業區劃對我來說確實很重要。因此，當您討論這一點時，我認為您在準備好的發言中評論道，加上鐵路收購似乎正在擴大您在東北地區及其周邊地區的潛在市場機會。我想知道你是否可以稍微擴展一下這一點。讓我們更詳細地了解這兩個移動部分如何增加您的潛在機會？

Well, what the New York City franchise opportunity provides is a number of things. I mean, number one, it provides certainty and sustainability and projectability of the business model in and around New York City. Which has had sort of an uncertain competitive footprint for decades. So it really changes the operating and financial metrics of that market for us, where we have been more quiet waiting for to see if this platform came through and waiting to see whether we were successful in it and achieving it.

嗯，紐約市的特許經營機會提供了很多東西。我的意思是，第一，它為紐約市及其周邊地區的商業模式提供了確定性、可持續性和可預測性。幾十年來，其競爭足跡一直存在不確定性。因此，它確實改變了我們該市場的營運和財務指標，我們一直在安靜地等待這個平台是否成功，並等待我們是否成功並實現它。

So now that there's clarity, I think it produces growth opportunities both organically and acquisition-wise in and around the market area, number one. Two, the disposal capacity in the Northeast is constrained, as everyone knows. We have some great assets, disposal assets in New York and up and along the Eastern Seaboard. But we are effectively at capacity in many of those assets. So we were shipping waste to third-party locations, and we were not able to take incremental volumes into our sites. What the Arrowhead acquisition did for us is it allowed us to internalize volumes that were going to third parties. It also allowed us to pull volumes out of our Northeastern facilities, and attract and contract with new volumes that are pricing in the Northeast for us. So it did that.

因此，現在情況已經很清楚了，我認為它在第一市場領域及其周邊地區產生了有機成長和收購成長機會。二是東北地區的處置能力受到限制，這是眾所周知的。我們在紐約和東海岸擁有一些巨大的資產、可處置資產。但我們的許多資產實際上已經滿載運作。因此，我們將廢棄物運送到第三方地點，但我們無法將增量廢棄物運送到我們的地點。收購 Arrowhead 為我們帶來的好處是，它使我們能夠內部化原本流向第三方的銷售量。它還使我們能夠從東北部工廠中撤出產量，並吸引並簽訂在東北部定價的新產量。所以它就這麼做了。

It also opened up M&A opportunities along the Eastern Seaboard that we otherwise would not have looked at. We are not prone to go in, particularly to a more urbanized market and acquire something that is non integratable. That's not part of our model. So this allowed us to achieve that. So it's done a number of things for us currently and forward-looking.

它也開啟了東海岸沿線的併購機會，否則我們不會關注這些機會。我們不太願意進入，尤其是城市化程度較高的市場，並獲得一些不可整合的東西。這不是我們模型的一部分。所以這使我們能夠實現這一目標。所以它為我們做了很多當前和前瞻性的事情。

Great color. And then on RNG, Mary Anne, you said the guide does not include any benefit from ITC tax credits in '24, that is just pure optionality. If treasury were to finalize guidance in a way that is consistent with the law, meaning allowing companies to claim the credit on what is essentially the major pieces of equipment. What could that possibly do in terms of incremental cash tax benefits to the company? Is that something you've sized and feel comfortable for sharing?

顏色很棒。然後，關於 RNG，瑪麗安妮，您說該指南不包括 24 年 ITC 稅收抵免的任何好處，這只是純粹的可選性。如果財政部以符合法律的方式最終確定指導意見，這意味著允許公司在本質上是主要設備上獲得信貸。這會為公司帶來哪些增量現金稅優惠？您是否已經確定了該內容的大小並願意分享？

Sure. Well, given the fact, Noah, that as you know, only a small percentage of our projects are -- we will own outright in '24, it's pretty nominal. It's about $10 million in incremental benefit that we'd expect.

當然。好吧，諾亞，正如你所知，我們的專案中只有一小部分是——我們將在 24 年完全擁有，這是相當名義上的。我們預計增量收益約為 1000 萬美元。

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

完整的產品組合一旦建成後呢？

Yes, that whole portfolio, I'm not in a position to give that yet. Just looking at what's qualifying equipment and what the actual outlays are for the projects, we'll know.

是的，整個投資組合，我還無法提供。只要看看什麼是合格設備以及專案的實際支出是多少，我們就會知道。

Our next question comes from Kevin Chiang from CIBC.

我們的下一個問題來自 CIBC 的 Kevin Jiang。

Maybe just on the -- congratulations on closing on the SECURE deal. I know this came out through a Competition Bureau Tribunal. And my understanding is that SECURE wasn't necessarily running these Tervita assets to their full capabilities. Just wondering how that might change under your ownership. And the revenue guide you provided related to that acquisition, is that the run rate SECURE was achieving? So any upside you'd see? Or is that the revenue you think you can achieve as you own these assets?

也許只是—恭喜您完成安全交易。我知道這是透過競爭局法庭得出的。我的理解是，SECURE 不一定能夠充分發揮這些 Tervita 資產的能力。只是想知道在你的所有權下這會發生什麼變化。您提供的與該收購相關的收入指南是否是 SECURE 所達到的運作率？那你會看到什麼好處嗎？還是這是您認為擁有這些資產可以獲得的收入？

Okay. A couple of pieces there, Kevin. So first off, there were 29 assets required to be divested by the tribunal, of which 22 were operating at the time of close. And I would say they were operating at full throttle, SECURE is a very good operator and they had optimized the facility. So the 22, we're running of the 29. And the guidance we have provided for '24 and SECURE includes those 22 facilities. There are 7 incremental facilities that we will be reopening over a period of time, perhaps some of those in '24, but certainly into '25. We're looking at that right now. That is not in what we have guided, okay? And we would not make those assumptions that, that would be anything material in '24 but it certainly could be incremental to '25 and beyond. So that's how I think you should think of what is in the guidance and what is available beyond that.

好的。那裡有幾塊，凱文。首先，仲裁庭要求剝離 29 項資產，其中 22 項資產在交易結束時仍在運作。我想說他們正在全速運轉，SECURE 是一個非常好的營運商，他們優化了設施。因此，22 號設施是我們運作的 29 號設施。我們為 24 小時和安全提供的指導包括這 22 號設施。我們將在一段時間內重新開放 7 個增量設施，其中一些可能會在 24 年，但肯定會在 25 年。我們現在正在研究這個問題。這不是我們所指導的，好嗎？我們不會做出這樣的假設，即這將在 24 年產生任何重大影響，但它肯定可能會增加到 25 年及以後。因此，我認為您應該如何考慮指南中的內容以及除此之外可用的內容。

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

這很有幫助。然後也許是——再次恭喜您贏得了紐約的區域。顯然，有許多競標者未能成功。我只是想知道，這是否會為您創造一個併購機會，讓您可以從那些對紐約有不同看法的運輸商那裡獲取資產，因為他們想要更少的區域，或者他們可能在投標過程後贏得任何區域？

Well, I would say, Kevin, generally, the answer is yes to everything you said, but it is a complex situation. So remember that while this is a franchise area, there are three nonexclusive franchisees awarded to each zone. You certainly can acquire -- potentially acquire someone within zones you have or other zones. But first, you must get the city and the BIC, the Business Council's approval of such and they have to determine what their comfort is on reducing competitors in a zone.

好吧，我想說，凱文，一般來說，你所說的一切答案都是肯定的，但這是一個複雜的情況。因此請記住，雖然這是一個特許經營區域，但每個區域都授予三個非獨家特許經營商。你當然可以收購——有可能收購你擁有的區域或其他區域內的某人。但首先，您必須獲得市政府和 BIC、商業委員會的批准，他們必須確定減少某個區域內的競爭對手的意願如何。

And then that could add a third competitor back if it was an overlapping zone. So there are a number of complexities. There are also caps on how many zones one can own right now. So they have to decide their comfort level if someone goes beyond that cap or do they then have to divest another zone or trade it. So it's a complex situation. But generally, I would say it improves our optionality and M&A opportunities in the city.

如果是重疊區域，那麼可能會增加第三個競爭對手。因此存在許多複雜性。目前可以擁有的區域數量也有上限。因此，如果有人超出了該上限，他們必須決定自己的舒適程度，或者他們是否必須剝離另一個區域或進行交易。所以這是一個複雜的情況。但總的來說，我想說它提高了我們在這座城市的選擇性和併購機會。

Our next question comes from Bryan Burgmeier from Citi.

我們的下一個問題來自花旗銀行的 Bryan Burgmeier。

I think on the last call, you talked about wage growth kind of moderating to maybe 6%, 6.5% and maybe the exit rate for '23 being 5%, 5.5%. I'm just wondering are those still good numbers? Is there any view on what that wage growth can look like in '24. I'm just kind of be cognizant of kind of ongoing inflation, some changes in your portfolio versus that strong margin expansion that you did see 4Q.

我想在上次電話會議上，您談到薪資成長可能會放緩至 6%、6.5%，23 年的退出率可能為 5%、5.5%。我只是想知道這些數字仍然不錯嗎？對於 24 世紀的薪資成長有何看法？我只是意識到持續的通貨膨脹，您的投資組合的一些變化，以及您在第四季度看到的強勁的利潤率擴張。

Sure. So with respect to wage growth, you're right, we talked about in 2023 of the moderation from a starting point of about 8% coming into the year to the exit of about 6%, which is what we saw in Q4, I think, to one of your questions that it did get to that level. So as we think about continued moderation and the nonrepeating of outsized increases or last year's level of increases, we would think about further moderation. And as we talk about underlying solid waste margin expansion, one of the drivers being cost moderation as we move through the year. So I think about it, we saw 8% to 6% 2023, 6% -- maybe the rate of slowing down flows. And so maybe it's 6% to 5% or sub-5 as we move through the year. That's probably a realistic way to think about some of those cost pressures moderating, specifically wages.

當然。因此，就薪資成長而言，你是對的，我們在 2023 年談到了從年初約 8% 的起點到退出時約 6% 的放緩，我認為這就是我們在第四季度看到的情況，對於你的一個問題，它確實達到了這個水平。因此，當我們考慮持續的放緩以及不再重複大幅增長或去年的增長水平時，我們會考慮進一步的放緩。當我們談論潛在的固體廢物利潤率擴張時，推動因素之一是今年的成本放緩。所以我想了一下，到 2023 年我們看到了 8% 到 6%，6%——也許是流量放緩的速度。因此，隨著這一年的推移，可能會出現 6% 到 5% 或低於 5% 的情況。這可能是考慮緩解成本壓力（特別是薪資壓力）的現實方法。

Got it. Got it. And can you just help size maybe the revenue impact from M&A in 1Q? I know the E&P deal closed mid-quarter. I'm not sure if there's some seasonality to be mindful of. And then just a smaller item is as you talked about Arrowhead maybe being slightly dilutive to margins at the beginning. Do you think that kind of flips to a slight positive in '24, especially with this new New York City business?

知道了。知道了。您能否協助衡量第一季併購對營收的影響？我知道勘探與生產交易已在季度中期完成。我不確定是否需要注意一些季節性。然後只是一個較小的項目，正如您所談到的，箭頭可能在一開始會稍微稀釋利潤。您認為這種情況在 24 年會出現輕微的正面變化嗎，尤其是在紐約市的這家新業務方面？

Sure. So with respect to the contribution from acquisitions in Q1 and how to think about that, about $65 million in Q1, and you should think about some seasonality as we head into Q2 even for the E&P business. So it's a little different from the underlying business, what drives the timing there. But so I would have overall acquisitions ramping a little bit as we move through the year and then dropping down toward the end of the year just as we anniversary some coming online. But $65 million for Q1 is a good way to think about it.

當然。因此，就第一季收購的貢獻以及如何思考這一點而言，第一季約為 6500 萬美元，當我們進入第二季時，即使是勘探與生產業務，您也應該考慮一些季節性因素。所以它與基礎業務有點不同，是什麼推動了那裡的時機。但因此，隨著我們今年的發展，我的整體收購量會略有增加，然後在年底時下降，就像我們慶祝一些上線的周年紀念日一樣。但第一季 6500 萬美元是一個很好的思考方式。

And then with regard to Arrowhead, I would tell you that as we move throughout '24, you are correct, that initially because of the rail component of transportation in the model Arrowhead was nominally dilutive to margins. It will be accretive to margins by midyear as volumes continue to ramp there. And as disproportionate amount of those volumes are our internal volumes. So you have an elimination -- an intercompany elimination, which raises the margin profile of the asset relative to volumes coming third party, which dilutes the margin profile of the assets. So there's semantics there that are important on the margin.

然後關於 Arrowhead，我想告訴你，當我們在整個 24 年進行時，你是對的，最初是因為 Arrowhead 模型中運輸的鐵路部分名義上稀釋了利潤。隨著銷量持續增加，到年中，利潤率將會增加。這些體積中不成比例的是我們的內部體積。因此，你有一個抵銷——公司間抵銷，它提高了資產相對於第三方數量的利潤率，從而稀釋了資產的利潤率。因此，邊緣語義很重要。

Our next question comes from John Mazzoni from Wells Fargo.

我們的下一個問題來自富國銀行的約翰·馬佐尼。

Congratulations on the strong results. Maybe ask it in a different way, could you talk to the competitive backdrop with your peers focusing more on sustainability projects and more about kind of what changes you're expecting in terms of -- kind of markets exiting '24, what you've seen -- or exiting '23, excuse me, into '24. And has there been any uptake from kind of sponsors, I think private equity dry powder is kind of in the trillion mark now, some kind of, like, say, $4 trillion. But how do we balance kind of the competitive backdrop as well as frame that within the M&A commentary?

祝賀取得了優異的成績。也許以不同的方式問這個問題，你能否與你的同行談談競爭背景，更多地關注可持續發展項目，更多地談論你期望的變化——退出 24 的市場，你已經經歷了什麼看到了－－或者退出'23，對不起，進入'24。我認為私募股權乾粉現在已經達到萬億大關，例如 4 兆美元。但我們如何平衡競爭背景以及在併購評論中建立競爭背景？

Okay. John, thanks. I think that's a complex question that you asked there was several parts. I'll try our best to answer it. So first off, look, sustainability is core to what we do and quite honestly, always has been. We have taken what I would consider a balanced approach, a moderated approach to RNG as a specific and sustainability. And as you've seen, we've said we'll do $200 million in EBITDA for $200 million in investment. And that's for our initial 12 projects that we'll bring online fully by '26. We have projects beyond that, okay, number one, that we have not yet talked about and nor do we plan to for some period of time. We are not betting the entirety of our future on sustainability, okay? It is one aspect of our strategy and our growth strategy.

好的。約翰，謝謝。我認為你問的問題很複雜，有幾個部分。我會盡力回答。首先，永續發展是我們工作的核心，老實說，一直都是如此。我們採取了我認為是一種平衡的方法，一種針對 RNG 的具體且可持續的溫和方法。正如您所看到的，我們已經說過，我們將以 2 億美元的投資實現 2 億美元的 EBITDA。這是我們最初的 12 個項目，我們將在 26 年前全面上線。我們還有其他項目，好吧，第一，我們還沒有討論過，而且我們在一段時間內也不打算討論。我們不會把整個未來都押在永續發展上，好嗎？這是我們的策略和成長策略的一方面。

We have ample to do in the core solid waste business from an organic and an M&A standpoint. And you're going to continue to see that happen throughout '24 and '25 and beyond. Others because of various reasons, have differential amounts focused on sustainability. Some of that size and an inability to do as much M&A in the current HSR requirements. So there's a great window of opportunity for us in that way. And those are excellent strategies for their companies as well. We are in a little bit different niche profile. As far as private equity, look, private equity has always been active in this space. Yes, maybe a little more so right now just because there's more dollars in private equity than there are deals to do. So that yields more involvement.

從有機和併購的角度來看，我們在核心固體廢棄物業務方面有很多工作要做。在 24 世紀和 25 世紀以及以後，您將繼續看到這種情況發生。其他人則由於各種原因，對永續性的關注程度有所不同。其中一些規模和無法按照當前高鐵要求進行盡可能多的併購。因此，這對我們來說是一個很好的機會之窗。這些對他們的公司來說也是極好的策略。我們的利基形象略有不同。就私募股權而言，你看，私募股權在這個領域一直很活躍。是的，現在可能更是如此，因為私募股權投資的資金多於可進行的交易。這樣就會產生更多的參與。

But to be very honest, we do not but heads that often with private equity in our M&A platform. Most private equity is focused on urban America because they are able to consolidate large amounts of revenue in short periods of time and flip it, which fits their model. We're only 15% urban. So 85% of the time we're in suburban and rural America, that's not a market strategy that $2 million to $5 million of deals at a time, you can consolidate a lot of revenue.

但說實話，我們在併購平台上常以私募股權主導。大多數私募股權公司都專注於美國城市地區，因為他們能夠在短時間內整合大量收入並進行翻轉，這符合他們的模式。我們只有 15% 是城市人口。因此，85% 的時間我們都在美國郊區和農村，這並不是一次 200 萬至 500 萬美元交易就能整合大量收入的市場策略。

So we're not too negatively impacted by private equity. Ultimately, we also have the opportunity as private equity exits theirs to take a look at those platforms. Arrowhead was such a platform, and we were successful there. So we are not using or seeing private equity as an excuse for not being able to get deals done, okay? We've always competed against them, and we'll continue to be successful doing so. They'll get their share, but we'll get ours and then some. So I believe that's what you were hinting at. But if I didn't address the core of your question, maybe you could clarify it for me.

所以我們並沒有受到私募股權太大的負面影響。最終，隨著私募股權公司退出，我們也有機會審視這些平台。 Arrowhead 就是這樣一個平台，我們在那裡取得了成功。因此，我們不會使用或將私募股權視為無法完成交易的藉口，好嗎？我們一直在與他們競爭，並且我們將繼續取得成功。他們會得到他們的份額，但我們會得到我們的，然後是一些。所以我相信這就是你所暗示的。但如果我沒有解決你問題的核心，也許你可以幫我澄清一下。

That's exactly what we were looking for. Great color. And maybe a quick segue into kind of the 34% EBITDA margin target. It seems like you could come to that sooner than expected. Could you just help us kind of frame what the puts and takes are there? And anything we should be cognizant of as we model '24 and looking to kind of the back half of the year and the exit rate?

這正是我們正在尋找的。顏色很棒。也許很快就會達到 34% 的 EBITDA 利潤率目標。看來你可以比預期更早做到這一點。您能幫助我們建立一下看跌期權和賣出期權的框架嗎？當我們為「24」建模並關註今年下半年的情況和退出率時，我們應該意識到什麼？

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

約翰，我將對此發表評論，然後我將讓瑪麗安妮提供更多詳細資訊。

Look, if you look at our Q3, which granted is the best seasonal quarter of the year, we reported 32.5% EBITDA margin and we swallowed almost 50 basis points of headwinds that we didn't expect. But just take the 32.5% that we did. You heard Mary Anne say relatively balanced on the 120 basis points of margin improvement. Let's just say that it's 120 for Q3. Well, now you're at 33.7% or above in Q3 of '24. So that's what gives us confidence in achieving 34% in some of our quarters throughout '24 as we ramp into '25. It's the math on where we are. So with that, I'll let Mary Anne comment.

看，如果你看看我們的第三季度，這是一年中最好的季節性季度，我們的EBITDA 利潤率為32.5%，並且我們承受了幾乎50 個基點的逆風，這是我們沒有預料到的。但就拿我們所做的 32.5% 來說吧。你聽到瑪麗安妮說，利潤率提高了 120 個基點，相對平衡。假設第三季是 120。好吧，現在 24 年第三季的比例為 33.7% 或更高。因此，這讓我們有信心在進入 25 年後，在 24 年的某些季度實現 34% 的目標。這是我們所處位置的數學。那麼，我將讓瑪麗安妮發表評論。

Sure. I guess, the other point, just the math behind it, if you look at the fact that we're guiding to 120 basis points, margin expansion in '24. It says we're halfway there since we just delivered 31.5%. And so there are various ways to get there and Ron ran through opportunities. But if you just look at '24 as an example, and the outsized margin expansion in the underlying business, it gives you a sense of what's possible. And so then the question just becomes not so much, is it 34%. It was never meant to be an endpoint. It was just illustrative of the ability to get back to prior peak margins. And we feel now well positioned to do even north of that.

當然。我想，另一點，只是背後的數學，如果你看看我們在 24 年指導利潤率擴張至 120 個基點這一事實。它說我們已經完成了一半，因為我們剛剛交付了 31.5%。所以有多種方法可以到達那裡，羅恩抓住了機會。但是，如果您僅以 '24 年為例，以及基礎業務中利潤率的大幅擴張，您就會了解到什麼是可能的。那麼問題就變得不那麼大了，是不是 34%？它從來就不是一個終點。這只是說明有能力回到之前的峰值利潤率。我們現在感覺自己已經做好了進一步的準備。

Our next question comes from Michael Hoffman from Stifel.

我們的下一個問題來自 Stifel 的 Michael Hoffman。

So can we get back to operations for a minute and talk about fleet. Am I correct? You'd like to buy 10% of your direct fleet, your routed trucks. We've been below that. What do you think is the outcome in '24 and correspondingly, how that sort of works its way through repair and maintenance cost?

那我們可以回到營運上來談談機隊嗎？我對麼？您想購買 10% 的直接車隊，即路線卡車。我們一直低於這個水平。您認為 24 年的結果是什麼？相應地，這種情況如何影響維修和維護成本？

Yes. So first off, Michael, I think your first comment is about percentage is accurate. Look, we -- I've been around. We've gotten approximately, if you look at '22 and '23 around 90%, maybe a hair below of our fleet in one way or another delivered. So we're running about 1 in 10 short, okay? We are being told that, that number should compress a little bit in '24 but there will still be some fleet push from '24 to '25. We're being told that, that should be closer to 5% to 8%, then maybe 10%. So you see improvement. And then we're being told that it normalizes in '25.

是的。首先，邁克爾，我認為你關於百分比的第一條評論是準確的。聽著，我們——我一直在附近。如果你看看‘22’和‘23’，我們已經以某種方式交付了約 90% 的機隊，可能比我們的機隊低了一點。所以我們的運行時間大約是十分之一，好嗎？我們被告知，這個數字應該在 24 年有所壓縮，但從 24 年到 25 年仍然會有一些機隊推進。我們被告知，這個比例應該接近 5% 到 8%，然後可能是 10%。所以你會看到進步。然後我們被告知它將在 25 年恢復正常。

So we believe by '25, we'll be back on track with the normal fleet replacement. As far as the maintenance side, look, the good news is it's in the numbers. And it's in the guidance and it's not one of the key drivers to delivering 34%. Quite honestly, you don't want accelerated fleet at a time when your turnover is highest and you're doing the most damage to new equipment. So we wanted to bring turnover down quite dramatically before we focused on any sort of movement upwards in fleet replacement because we're -- it's just not going to show up in the maintenance when you've got so many new employees. So it actually has been somewhat of a blessing, to be honest. And we feel good about the timing of how the fleet will -- allocation will improve as we go through '24 into '25.

因此，我們相信到 25 年，我們將透過正常的機隊更換回到正軌。就維修方面而言，好消息是數字。它在指導中，但並不是實現 34% 的關鍵驅動因素之一。老實說，您不希望在營業額最高且對新設備造成最大損害的時候加速車隊。因此，在我們專注於車隊更換方面的任何形式的向上運動之前，我們希望大幅降低人員流動率，因為當你有這麼多新員工時，它就不會出現在維護中。所以說實話，這其實是一種祝福。我們對機隊的時機安排感到滿意——隨著我們從“24 年”進入“25 年”，分配將會得到改善。

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

好的。將齒輪切換到箭頭。它每天的容量相當大。我們在哪裡最大化利用率？您在評論中提到，您一直在重新調整自己的音量，那麼趨勢是什麼樣的呢？

Well, what I would tell you, Michael, so as you know, maybe not everyone does, Arrowhead has a 15,000 ton per day permit. When we acquired Arrowhead, it was handling just under or around 3,000 tons a day. We have improved that by 35% or more already. I believe we will exit '24 at doubling where it was originally. And I think longer term is '25 into '26. These things take some time. I think you'll see us approaching triple what we originally acquired it at.

好吧，我要告訴你的是，邁克爾，正如你所知，也許不是每個人都知道，Arrowhead 擁有每天 15,000 噸的許可證。當我們收購 Arrowhead 時，它每天的處理量略低於或約為 3,000 噸。我們已經將其改進了 35% 或更多。我相信我們將在 24 年結束時以原來的兩倍的價格退出。我認為長期是“25 到 26”。這些事情需要一些時間。我想你會看到我們的價格接近最初收購價格的三倍。

Okay. And then as you think about the SECURE business, you're dependent on production. And if I remember correctly, even in COVID, the Canadian production didn't go down that low given all the disruption. So what's the sensitivity to shut in? Help everybody get comfortable that this is really stable.

好的。然後，當您考慮安全業務時，您就依賴生產。如果我沒記錯的話，即使在新冠疫情期間，考慮到所有的干擾，加拿大的產量也沒有下降那麼低。那麼關門的靈敏度是多少呢？幫助每個人都放心，這確實很穩定。

Yes. So as you said, Michael, I mean, the Canadian E&P market is very different than the U.S. Again, just to reiterate, the U.S. our R360 business is about 80% drilling oriented. So it is highly sensitive to rig count and crude price. The Canadian market is really inverted because they do not do a lot of fracking. So their market is 80% to 85% production oriented. We look back over a 5-year period during diligence that the assets we would be acquiring. And crude move -- a Western Canadian crude moved from a high of about $80 a barrel to around $32. So that's a pretty significant swing and revenue changed 8% peak to trough and EBITDA changed 12% peak to trough. So I think that shows the significant difference between a production-oriented model and a drilling-oriented model. And that's quite honestly, one of the things we loved about the assets is it derisked our combined portfolio and brought it more to a 50-50 balance.

是的。正如你所說，邁克爾，我的意思是，加拿大勘探與生產市場與美國有很大不同。再次重申，美國我們的 R360 業務大約 80% 以鑽井為導向。因此它對鑽機數量和原油價格高度敏感。加拿大市場確實是相反的，因為他們不進行大量的水力壓裂。所以他們的市場80%到85%是生產導向的。我們在五年期間的盡職調查中回顧了我們將要收購的資產。原油走勢－加拿大西部原油從每桶約 80 美元的高點上漲至 32 美元左右。因此，這是一個相當大的波動，收入從高峰到低谷變化了 8%，EBITDA 從高峰到低谷變化了 12%。所以我認為這顯示了以生產為導向的模型和以鑽井為導向的模型之間的顯著差異。老實說，我們喜歡這些資產的原因之一是它降低了我們組合投資組合的風險，並使其達到 50-50 的平衡。

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

知道了。然後加拿大，特別是在安大略省，您的業務很好，正在推出 EPR 計劃。您是他們合約授予的受益者之一嗎？

No. And we were -- that was quite intentional, to be honest with you. So first off, let us say this. We think the EPR opportunities in Canada are nice opportunities. okay? There are nice opportunities for providers whose business is predominantly a residential platform. We have purposely tapped away from since acquiring progressive and have shed most of the residential business in Canada purposely, and we are much more of a commercial and disposal platform company in Canada.

不。老實說，我們是故意的。首先，讓我們這麼說。我們認為加拿大的 EPR 機會是很好的機會。好的？對於業務主要是住宅平台的提供者來說，有很好的機會。自從收購 Progress 以來，我們有意放棄了加拿大的大部分住宅業務，我們更像是加拿大的商業和處置平台公司。

And that's reflective, you can see our segment margins in our filings, and that is reflective of what we've done. If you look at that relative to our peers, our margins are almost double. So we're not looking to move heavily into the residential muni contract business in Canada. That business tends to be a 5-year type business. Those are very short-term contracts. And if you have assets, particularly MRF assets that are underutilized and you're able to add a relatively nominal amount of capital, those investments make a lot of sense. That's not our asset platform in Canada. So it really -- I think it's a great opportunity, but it's not an opportunity that we're really pursuing because of asset mix.

這是反思性的，你可以在我們的文件中看到我們的分部利潤率，這反映了我們所做的事情。如果你對比我們的同業來看，我們的利潤幾乎是兩倍。因此，我們不打算大力進軍加拿大的住宅市政合約業務。該業務往往是 5 年期業務。這些都是非常短期的合約。如果您擁有未充分利用的資產，特別是 MRF 資產，並且您能夠添加相對名義上的資本，那麼這些投資就很有意義。那不是我們在加拿大的資產平台。所以這確實是——我認為這是一個很好的機會，但由於資產組合的原因，這並不是我們真正追求的機會。

Got it. Last one for me. So RNG comes with some incremental volatility potentially because of the credit. What is your strategy around defeasing that risk?

知道了。最後一張給我。因此，RNG 可能會因為信用而帶來一些增量波動。您降低這種風險的策略是什麼？

Well, sure, Michael, as you know, and for anyone who doesn't know, we -- that's just fundamental to the way we approached RNG with the portfolio approach and the variety of ownership structures and the fact that we'll own outright about 1/3 of the projects that we ultimately participate in. So right there, that's one element of derisk and the other is hedging RINs. And we opportunistically put those hedges in place. We've done it in the past. So we'll -- that's how we think about it fundamentally, and that's the way to derisk it.

好吧，當然，邁克爾，正如你所知，對於任何不知道的人，我們 - 這只是我們通過投資組合方法和各種所有權結構來接觸 RNG 的方式的基礎，以及我們將完全擁有的事實我們最終參與的項目中大約有1/3。因此，這是消除風險的一個要素，另一個是對沖RIN。我們會趁機設定這些對沖。我們過去已經做到了。所以我們會——這就是我們從根本上思考它的方式，這就是消除風險的方法。

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

我們的下一個問題來自 RBC 資本市場的 Walter Spracklin。

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

只是想要兩個希望快點的。首先，在鐵路方面，廢鐵路方面，羅恩，您在電話會議上多次提到這一點，尤其是在您完成交易時。如果從經濟角度來看，你認為你能把這個規模擴大到多大程度，看起來相當有吸引力。您認為您可以在多大程度上充分利用各個方面來擴大規模？或者這種對你來說更具外科手術式的戰術選擇，不會真正改變你的總數，但在增量的基礎上很好？

So I've got to dissect it a little bit, Walter. So first off, as I mentioned earlier, that landfill has the capacity to take 15,000 tons a day when we acquired, it was taking 3,000. So it was 20% utilized, if you will, right? And I mentioned that I thought by the time we exit '24, we'll double that. So that it would be 40% utilized. And that as we come through '25 and then '26, we think we can get that up to 3x where we were. So in that scenario, 60% utilized. There really is no rail constraint on utilization. It's just incremental cars and loading and track. So that is not the scalability issue. So look, in the size of our corpus, is this going to be something that moves the needle 100 basis points on its own? No. And we've never said that.

所以我必須稍微剖析一下，沃特。首先，正如我之前提到的，當我們收購該垃圾掩埋場時，該垃圾掩埋場每天的處理能力為 15,000 噸，而當時是 3,000 噸。如果你願意的話，它的利用率是 20%，對吧？我提到，我認為到 24 年退出時，我們將把這個數字翻倍。這樣它就會被利用40%。當我們經歷 25 年和 26 年時，我們認為我們可以將其提高到原來的 3 倍。因此，在這種情況下，利用率為 60%。鐵路的利用率確實沒有限制。這只是增量車、裝載和軌道。所以這不是可擴展性問題。那麼看看我們的語料庫的大小，這是否會導致指標本身移動 100 個基點？不，我們從來沒有這麼說過。

But here is how it moves the needle. It moves the needle on what our growth can be M&A-wise because of the market areas that we can now integrate that we never looked at before. So in that way, I do consider it a needle mover. Put it at a point or more in M&A growth per year for a while. I think it could. And I think the compounding of that is something. So that's where I'd say -- and that's one of the reasons I gave commentary that we're fairly bullish on the M&A environment for '24 as we sit here 45 days into the year. So hopefully, that gives you some color on our thoughts on that opportunity.

但它是如何推動這一趨勢的。它推動了我們在併購方面的成長，因為我們現在可以整合我們以前從未關注過的市場領域。所以從這個角度來說，我確實認為它是一個推動者。暫時將其置於每年併購成長的某一點或以上。我認為可以。我認為這種情況的複雜化是很重要的。這就是我要說的——這也是我發表評論的原因之一，我們對 24 年的併購環境相當樂觀，因為今年已經過了 45 天。希望這能讓您對我們對這個機會的想法有所了解。

Yes, that's great color, Ron. I appreciate that. And my second question here is on volume. I know I've had some inbounds on negative volume that you've had through the course of 2023 and the negative volume you're now projecting for 2024 and some are comparing that to your peers, which are in the positive territory. Two aspects, I know Mary and I have talked about this before, but I just wanted to flag it. There's not really an apples to oranges -- there is an apples-to-oranges compare there, I think, and perhaps you can elaborate on that. And then second is on how much of the volume is really purposeful shedding that you completed in 2023 that's just carrying forward to 2024 as opposed to a projection for a persistent negative volume outlook for your company?

是的，那顏色真棒，羅恩。我很感激。我的第二個問題是關於音量。我知道我對你們在 2023 年期間經歷的負交易量以及你們現在預測的 2024 年負交易量有一些入站，有些人正在將其與處於正區間的同行進行比較。兩個方面，我知道瑪麗和我之前已經討論過這個問題，但我只是想標記一下。並沒有真正的蘋果與橙子的比較——我認為，存在蘋果與橙子的比較，也許你可以詳細說明這一點。第二個問題是，您在 2023 年完成的銷售中有多少是真正有目的的剝離，只是結轉至 2024 年，而不是對您公司的銷售前景持續為負的預測？

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

當然。很高興回答這些問題。首先，就你的觀點而言，我確實認為我們——不同的公司在價格和數量上的溝通方式不同，我們的嚴格是固體廢物量，沒有增量RNG或回收設施上線的好處，我相信這將是附加的，以其他人的體積計算。

So just with that as a starting point. And then, of course, what also goes along with that is how we communicate price. And when some people talk about core price, it's not what they ultimately report, but it's what they put on the street. When we give you price, those are the numbers we expect to report. That's how we guide and that's what we talk about with respect to price. So necessarily or understandably, it means that the way we -- we're talking about price one way, it's going to drive how we talk about volume. And so again, the calculations are probably a little different. But here's what we do know. We know that as we exited 2023, we had purposeful shedding. So if we were at a run rate of negative 2.5% volume, we said about a point of that is purposeful shedding from contracts that we walked away from or rebid in such a way that we knew we wouldn't ultimately hold on to it, and that was okay because they were poor quality revenue contracts or customers.

所以以此為起點。當然，隨之而來的是我們傳達價格的方式。當一些人談論核心價格時，這並不是他們最終報告的價格，而是他們擺在街上的價格。當我們給您價格時，這些是我們期望報告的數字。這就是我們的指導方式，也是我們談論價格的方式。因此，必然或可以理解的是，這意味著我們以一種方式談論價格的方式，它將推動我們談論數量的方式。同樣，計算結果可能略有不同。但這是我們所知道的。我們知道，當我們結束 2023 年時，我們有目的地進行了剝離。因此，如果我們的成交量為負 2.5%，我們說其中一點是有目的地放棄我們放棄或重新投標的合同，這樣我們就知道我們最終不會保留它，這沒關係，因為他們是質量很差的收入合約或客戶。

Additionally, we've acknowledged that in our pricing strategy, we acknowledge that there's a price volume trade-off, which we think is an acceptable trade-off and we encourage people to look at where margins go. When you make that trade-off. And so if you see -- look at our exit rate of about 1 point for each of those two things, and then I'd say quarter-specific drivers like difficult comparisons or weather would be additive to that. So then that's why, as we said in Q1, coming in, the exit rate was around 2.5%. And we know that we had not only tough comparisons in Q1 to last year because of hurricane-related disposal, but we also have the weather we've already seen. And so that's how we think about coming into the year, most negative in Q1 for that reason and that improving over the course of the year as we anniversary some of those purposeful losses.

此外，我們承認，在我們的定價策略中，我們承認存在價格量權衡，我們認為這是一個可以接受的權衡，我們鼓勵人們專注於利潤的去向。當你做出這種權衡時。因此，如果您看到 - 看看我們對這兩件事的退出率約為 1 個百分點，然後我會說特定季度的驅動因素（例如困難的比較或天氣）將對此進行補充。這就是為什麼，正如我們在第一季所說，進入、退出率約為 2.5%。我們知道，由於與颶風相關的處置，我們不僅在第一季與去年進行了艱難的比較，而且我們還擁有我們已經見過的天氣。這就是我們對今年的看法，由於這個原因，第一季最為負面，隨著我們紀念其中一些有目的的損失，這種情況在這一年中有所改善。

And Walter, I would add, again, we talked about this on the last call. But so -- number one, the purposeful shedding by us in our model is not new. We have done this for decades, okay? Others who are not really very active at this point in M&A, don't have that in their model to do, okay? So that is a difference. When we are acquiring use a number, $200 million, $300 million a year of revenue year in, year out, year in, year out, some years double that all of '22, we've said there's maybe 15% to 20% of private company revenue that when you acquire it, you know you're going to either price it to improve it or lose it.

我想再次補充一下，沃爾特，我們在上次通話中討論了這個問題。但是，第一，我們在我們的模型中有目的地進行脫落並不是什麼新鮮事。我們已經這樣做了幾十年了，好嗎？其他目前在併購方面並不是非常活躍的人，在他們的模型中沒有這樣做，好嗎？所以這是有差別的。當我們收購一個數字時，每年 2 億美元、3 億美元的收入年復一年，年復一年，有些年份是 22 年全年的兩倍，我們說過可能有 15% 到 20%私人公司的收入，當你獲得它時，你知道你要么定價以改善它，要么失去它。

So the difference of why that shows up now is that the underlying economy is effectively dead flat. And you heard our largest competitor in the nation who would be the greatest proxy for the economy on volume, say it's 0% to 1%, Oh, and that's with RNG making up the 1%. So they said it was 0. That's what -- so if it's 0 organic volume growth at 0 to 1 and you do shedding, you're negative. It's just that simple.

因此，現在出現這種情況的不同之處在於，基礎經濟實際上完全持平。你聽到我們在全國最大的競爭對手，他們將是經濟體量的最大代表，說是 0% 到 1%，哦，那是 RNG 佔 1%。所以他們說它是 0。這就是 - 所以如果它是 0 有機體積增長在 0 到 1 並且你確實脫落，你就是負數。就是這麼簡單。

Our next question comes from James Schumm from TD Cowen.

我們的下一個問題來自 TD Cowen 的 James Schumm。

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

只是一個高層次的問題，你已經觸及了一點。但從歷史上看，與同行相比，您可能沒有太多接觸回收的機會。但我想知道，鑑於最近的技術進步或 EPR 立法，這種情況是否會在不久的將來發生改變。我的意思是，你在加拿大談到了這個問題，但如果可以的話，也許可以談談美國。

Yes. Well, number one, I think part of it has been a model difference, James. As I mentioned, we have substantially less urban exposure than some of our larger peers in our model. And a lot of recycling in the U.S. has occurred in the coastal areas, which tend to be more urbanized, okay? So we just have a little bit less exposure to it. There is no question that technology will aid and is making recycling a better business model every day, every year. And can produce some very acceptable returns with the right market and the right technology. So yes, you will see recycling over time, grow as a percentage. There is also a push for diversion legislation and recycling in many states that up to this point, there had not been as much of a push. So it will ultimately continue to develop, and we're good with that. That extends life of our landfills, which are a non-replicable asset. It limits the timing on capital for landfills for expansion. And so it's a process, it's evolutionary that we feel very comfortable with overall.

是的。好吧，第一，我認為部分原因是型號差異，詹姆斯。正如我所提到的，在我們的模型中，我們的城市風險比一些較大的同行要少得多。美國的大量回收工作發生在沿海地區，這些地區往往更城市化，好嗎？所以我們接觸它的機會稍微少了一點。毫無疑問，科技將提供幫助，並使回收成為每天、每年更好的商業模式。並且可以透過合適的市場和合適的技術產生一些非常可接受的回報。所以，是的，隨著時間的推移，你會看到回收率呈現百分比成長。許多州也推動了轉移立法和回收利用，但到目前為止，推動力度還沒有那麼大。所以它最終會繼續發展，我們對此感到滿意。這延長了垃圾掩埋場的壽命，因為垃圾掩埋場是不可複製的資產。它限制了垃圾掩埋場擴建的資金時機。所以這是一個過程，它是一個漸進的過程，我們總體上感到非常舒服。

And I would just add to that, James, that, of course, increasing the recyclables we process ourselves is one of our sustainability objectives, and we have been seeing growth every year, and we've built two new facilities and you added the latest technology and have 50 robotics units in operation at our facilities and continue to make investments to Ron's point, to make it an even better business and to derisk it for ourselves because it's a service we provide, but not in all cases, do we use our own recycling facilities. And so we've been advancing and improving that.

我想補充一點，詹姆斯，當然，增加我們自己處理的可回收物是我們的可持續發展目標之一，我們每年都在看到增長，我們建造了兩個新設施，你添加了最新的設施技術，並在我們的設施中運行50 個機器人單元，並繼續按照Ron 的觀點進行投資，使其成為更好的業務，並為我們自己消除風險，因為這是我們提供的服務，但並非在所有情況下，我們是否都使用我們的服務自己的回收設施。所以我們一直在推進和改進這一點。

Okay. Great. And then I'm just wondering if landfill costs will rise at your other 100-plus landfills in 2024 to prevent another ETLF like is there a change in strategy in the wake of events at the Chiquita landfill or should we not expect much change here?

好的。偉大的。然後我只是想知道，到2024 年，你們其他100 多個垃圾掩埋場的垃圾掩埋成本是否會上升，以防止再次出現ETLF，例如奇基塔垃圾掩埋場發生事件後，策略是否會發生變化，或者我們是否不應期望這裡有太大變化？

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

嗯，第一，我認為你不應該因為奇基塔發生的事情而預期我們的垃圾掩埋場成本會逐步增加或逐步增加。正如我們所說，奇基塔發生的事情是，ETLF 非常非常罕見。它們是在非常獨特的情況下發生的自然有機反應。它們會發生在其他地方嗎，當然可以。但我認為更重要的是，我們在奇基塔事件發生後正在做什麼，我們了解到，這將有助於在發生這種情況時最大限度地減少對親屬的影響。 。

And so we have made some engineering protocol changes of some more centralized landfill, well temperature monitoring on a more frequent basis. We have decided as that if we experience that, that we will drill wells to alleviate temperature earlier. And then as a company, over 5 years ago, we stopped taking much of the material that we believe can cause ETLFs, which tend to be some sort of aluminum production material or untreated auto shredder fluff. So yes, there are things we are doing, but they are not things that you should see rippling through the P&L.

因此，我們對一些更集中的垃圾掩埋場進行了一些工程協議更改，更頻繁地進行井溫監測。我們決定，如果遇到這種情況，我們將儘早打井以緩解氣溫。然後，作為一家公司，五年多前，我們停止使用大部分我們認為會導致 ETLF 的材料，這些材料往往是某種鋁生產材料或未經處理的汽車粉碎機絨毛。所以，是的，我們正在做一些事情，但你不應該看到這些事情會影響損益表。

Our next question comes from Stephanie Moore from Jefferies.

我們的下一個問題來自 Jefferies 的 Stephanie Moore。

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

我想回顧一下定價的一些顏色。我認為除了指數合約之外，也許您會稍微了解一下與客戶就定價進行的對話，以及與往年相比如何。那會有幫助的。

Sure. I'd say that things are playing out really pretty much as we'd expected. Coming into the year, we knew that we were coming off of 2 years of outsized price increases, and we were looking forward to not needing that same level of pricing, right. Doing 9.5% in each of the last 2 years implied that in our competitive markets, those increases were well north of that. And we talked about that 11%, 13%, 14%. So it's a relief to be down in more of the 7%, 8.5% type of range on price increases. I'd say that in terms of those conversations, retention is pretty similar to historic levels. You come in kind of expecting that 85% type of level. We've had periods when there was hyperinflation, it was stickier than that. And I'd say we've reverted back to more normalized levels, and that's the way those conversations are playing out.

當然。我想說，事情的發展確實和我們預期的一樣。進入這一年，我們知道我們即將擺脫兩年的大幅價格上漲，我們期待不需要同樣水平的定價，對吧。過去兩年每年增長 9.5%，這意味著在我們競爭激烈的市場中，這些增長遠遠超出了這一水平。我們討論了 11%、13%、14%。因此，價格上漲幅度在 7%、8.5% 的範圍內下降，這讓人鬆了一口氣。我想說，就這些對話而言，保留率與歷史水準非常相似。你可能會期待 85% 的水平。我們曾經經歷過惡性通貨膨脹的時期，但情況比這更棘手。我想說，我們已經恢復到更正常化的水平，這就是這些對話的進行方式。

Great. That's helpful. And then maybe just a follow-up on some prior questions on the Arrowhead deal. As you think about future M&A, do you see similar opportunities maybe similar to Arrowhead on the horizon? Those that provide greater rail access or transfer footprint outside of your traditional core markets?

偉大的。這很有幫助。然後也許只是對有關 Arrowhead 交易的一些先前問題的後續行動。當您考慮未來的併購時，您是否看到類似的機會可能與地平線上的 Arrowhead 相似？那些在傳統核心市場之外提供更廣泛的鐵路通道或換乘足跡的企業？

Well, I would tell you, Stephanie, that Arrowhead was a unique asset. And we are not currently looking at anything that is analogous to it. But I will also say that, look, as landfill prices continue to move upwards over time and aerospace in markets contract. It is a natural modality that waste will -- more waste will move by rail over time. And in geographies, perhaps that it doesn't today. So I do believe that there will be opportunities for incremental Arrowhead type acquisitions, but I don't feel that, that is imminent, but it will occur over time.

好吧，我會告訴你，史蒂芬妮，箭頭是一項獨特的資產。我們目前還沒有看到任何類似的東西。但我還要說，隨著時間的推移，垃圾掩埋場價格持續上漲，而航空航太市場也在收縮。這是垃圾產生的一種自然方式——隨著時間的推移，更多的垃圾將透過鐵路運輸。在地理上，也許今天情況並非如此。所以我確實相信會有增量箭頭型收購的機會，但我不認為這是迫在眉睫的，但它會隨著時間的推移而發生。

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

我們的下一個問題來自 Truist Securities 的 Tobey Sommer。

This is Jack Wilson on for Tobey. So specifically in 2024, is there going to be any sort of quarters that are especially heavy with capital expenditures or given the Chiquita and RNG spend?

這是托比的傑克威爾森。那麼具體到 2024 年，是否會有任何一個季度的資本支出特別大，或考慮到 Chiquita 和 RNG 的支出？

No, there's nothing that stands out as being unique in any quarter. But just a reminder that free cash flow generation in any year, the quarters can be lumpy for a variety of reasons outside of CapEx, for instance, interest and taxes. So I wouldn't get too hung up on activity and in one individual quarter.

不，任何季度都沒有什麼是獨一無二的。但需要提醒的是，任何一年的自由現金流生成，各季度都可能因資本支出以外的各種原因而不穩定，例如利息和稅收。所以我不會太沉迷於某個季度的活動。

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

好的。然後，就紐約的新勝利和有意的放棄而言，這是否會改變您對市場敞口的看法，或者改變您對二級特許經營和城市特許經營的等待方式？

No. I mean, we're opportunistic in terms of acquisition opportunities. As we always say, sellers drive the timing of deals. But as Ron said in his remarks, our strategy hasn't changed. We know the types of markets we're interested in. And a lot of these deals are the outcome of quarters or even years of dialogue. And so there's no change in thinking about that at all.

不，我的意思是，我們在收購機會方面是投機取巧的。正如我們常說的，賣家決定了交易的時機。但正如羅恩在演講中所說，我們的策略並沒有改變。我們知道我們感興趣的市場類型。其中許多交易都是幾個季度甚至幾年對話的結果。因此，對此的想法根本沒有改變。

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

女士們、先生們，這是我們今天的最後一個問題，我想將發言權交還給管理階層，讓他們發表結束語。

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

好的。好吧，如果沒有其他問題，我們代表我們整個管理團隊，感謝您收聽並關注我們今天的電話會議。 Mary Ann 和 Joe Box 今天可以回答我們未涵蓋但根據 FD 法規、G 法規和加拿大適用證券法允許我們回答的任何直接問題。再次感謝你。我們期待在即將舉行的投資者會議或下一次財報電話會議上見到您。

Ladies and gentlemen, with that, we'll conclude today's conference call and presentation. We thank you for joining. You may now disconnect your lines.

女士們先生們，我們今天的電話會議和演示就到此結束。我們感謝您的加入。現在您可以斷開線路。