Waste Management, Inc.

Good day, and thank you for standing by. Welcome to the WM Third Quarter 2023 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, it will be a question-and-answer session. To ask a question during a session, you will need to press star 1-1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1-1 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Ed Eggle. Senior Director of Investor Relations. Please go ahead.

Thank you, Victor. Good morning, everyone, and thank you for joining us for our third quarter 2023 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 Davina Rankin, Executive Vice President and Chief Financial Officer. You'll 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 Davina will cover the details of the financials. Before we get started, please note that we file the 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 for 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. 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 files with the SEC, including our most recent Form 10-K. 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 Davina will discuss operating EBITDA, which is income from operations before depreciation and amortization. Any comparisons, unless otherwise stated, will be with the third quarter of 2022. Net income, EPS, operating EBITDA margin, and SG&A expense results have been adjusted to enhance comparability by including 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 p.m. Eastern time today. To hear a replay of the call, access the WM website at www.investors.wm.com. Time-sensitive information provided during today's call, which is occurring on October 25, 2023, may no longer be accurate at the time of a replay. Any redistribution, retransmission, or rebroadcast of this call in any form without the express written consent of WM is prohibited. Now I'll turn the call over to WM's President and CEO, Jim Fish.

Thanks, Ed, and thank you all for joining us. Our third quarter results are a testament to our team's ability to deliver on the priorities we set for 2023, including increasing profitability through disciplined pricing and optimizing our cost structure. Against the challenging backdrop, we've remained focused on the things we can control, and this diligent focus is evident in our third quarter results. Adjusted operating EBITDA grew by more than 6% and margin expanded 100 basis points to 29.6% when compared to Q3 of 2022. Our strong results in the quarter were powered by our solid waste business. Organic revenue growth in the collection and disposal business remains solid and is tracking well against our expectations. Third quarter core price of 6.6% reflects robust price performance across all lines of business. We're also pleased with the resilience of our solid waste volumes as commercial volumes turned mostly positive and special waste growth improved from the second quarter. And what really stands out for this quarter is our success in managing the middle of the P&L. We continue to drive SG&A leverage, and we're also gaining momentum on operating cost optimization and efficiency gains. Our long-term focus on using automation and technology to optimize our cost structure is paying off as we're choosing not to replace certain high turnover, difficult to fill positions. Since January of 2022, we've leveraged attrition and technology to reduce headcount by 1,650 positions. We continue to be focused on the full opportunity of 5,000 to 7,000 position eliminations through attrition and technology over four to five years, and we're pleased with this progress to date. You'll hear more details about our cost performance from John and Davina. Putting it all together, our focus on price, efficiency, and cost control translated into the strong operating leverage we produced in the quarter. Turning to our strategic investments in sustainability growth, the investment proposition for growing our renewable energy and recycling business remains strong. and our project execution is tracking well. Our seventh renewable natural gas plant and the third of 20 facilities in our growth program is expected to be in service in January. And we have another four facilities on track for completion in 2024, including two of the largest projects in the portfolio, Fairless in Pennsylvania and Orchard Hills in Illinois. On the recycling front, we've completed technology and automation upgrades at two facilities in the quarter. and we have two more upgrades and a new facility in Nashville slated to begin service by the end of this year. Our automated network continues to drive great results by pushing our labor and processing costs lower, improving throughput, and driving enhanced material quality, which benefits the recycling business in any commodity environment. Yet again in the third quarter, we saw materially lower labor costs per ton at our automated facilities at about 35% below the rest of our recycling network. Our investments in developing the blueprint for a modern recycling facility sets us apart within the communities we serve and are unlocking further growth opportunities. With one quarter remaining in the year, we're well positioned to deliver on the 2023 financial outlook we provided last quarter, including adjusted operating EBITDA growth of 6% at the midpoint. We continue to expect a margin run rate exiting the year of about 29%, underpinned by 62% operating expenses as a percent of revenue and 9% SG&A as a percent of revenue. We're pleased with our results through the first nine months of the year. Our team is very focused on price discipline and cost optimization to deliver a strong finish to the year and lay the groundwork for further growth in 2024. I want to thank each of our team members for their commitment to our customers and their many contributions to our success. I'll now turn the call over to John to discuss our operational results for the quarter.