Waste Management, Inc.

Hello, and thank you for standing by. Welcome to WM first quarter 2024 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask the question during this session, you will need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. I would now like to hand the conference over to Ed Agle, Senior Director of Investor Relations. You may begin.

Thank you, Tawanda. Good morning, everyone, and thank you for joining us for our first 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 Davina 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 Davina will cover the details of the financials. Before we get started, please note that we have filed a Form 8K that includes the earnings press release and is available on our website at www.wm.com. The Form 8K, 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 prior year period, net income, EPS, Income from operations and margin, operating EBITDA and margin, and prior period operating expense 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. Additionally, projected future operating EBITDA and margin is anticipated to be adjusted to exclude such items that are not currently determinable but may be significant. 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 gap measures and additional information about our use of non-gap measures and non-gap 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 April 25, 2024, 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.

All right. Thanks, Ed, and thank you all for joining us. The WM team delivered another quarter of strong financial results to start 2024, powered by outstanding operational performance in the collection and disposal business. Total company operating EBITDA grew nearly 15% in the first quarter, and margin expanded 240 basis points, driven by substantial momentum on cost optimization efforts and disciplined execution on our pricing programs. Last quarter, we said the areas of strength in 2024 would look very similar to those of 2023, and that was definitely the case in Q1. Continued traction on cost optimization led to our third consecutive quarter of operating EBITDA margin above 29.5%, with Q1 coming in at 29.6% in the historically lowest margin quarter of the year. This margin result exceeded our expectations and reflects the tangible benefits of technology on our operating costs, the sustained effectiveness of our pricing strategy, and the substantial progress we're delivering on our sustainability initiatives. It's our track record in these areas that gives us confidence we're positioned to deliver our highest-ever full-year operating EBITDA margin between 29.7% and 30.2%, which is more than 100 basis points of expansion from 2023 at the midpoint. Our ability to convert more of each revenue dollar to earnings and free cash flow allows us to raise our prior outlook for both operating EBITDA and free cash flow by $100 million. As we progress through 2024, we're maintaining our focus on three priorities. Disciplined pricing across each line of business, leveraging technology to permanently reduce our cost to serve our customers, and executing on our strategic investments in sustainability growth. John and Davina will cover more details on where we're seeing traction within the cost structure and where we have further runway, so I want to spend a few minutes on the other two priorities, our pricing strategy and the progress we're making in expanding our sustainability businesses. Beginning with pricing, we're pleased with the results we've seen from embracing a customer lifetime value model. Our teams are able to leverage customer specific analysis to understand where a customer is on their journey, and design actionable strategies that will extend customer retention, improve profitability, or both. We're confident that we've found a winning approach to data-driven decision-making that optimizes price to reflect the value of the services we deliver, the strength of the asset network, and our leading commitment to environmental sustainability. Our first quarter results again show that we have the ability to leverage price increases to cover costs and grow margin while also reducing customer churn. Shifting to our sustainability businesses, during the quarter we delivered growth projects across the recycling and renewable energy businesses. This includes completing a large recycling upgrade in Germantown, Wisconsin. The updated facility relies on state-of-the-art equipment that reduces labor costs, increases throughput by 20%, up to 60 tons of material per hour, and improves product quality. We have another nine upgraded facilities scheduled for completion this year, and we'll be opening three new recycling facilities and expanding our industry-leading single stream network even further. Additionally, we've completed a new renewable natural gas facility this quarter at our DFW landfill in the Dallas-Fort Worth market, and we remain on track to commission another four new renewable natural gas facilities in 2024. We're also excited to announce that WM was just named the official sustainability partner of Major League Baseball. WM's work with MLB is the first collaboration of its kind between an environmental services company and a professional sports team league. With this partnership, we have the opportunity to offer services to all 30 MLB clubs in the United States and Canada. We expect to leverage our expertise to build comprehensive plans to improve the environmental impact of Major League Baseball and its clubs. In closing, I want to thank our WM team for all their hard work during the quarter. I'm immensely proud of their dedication and execution, which have helped achieve such strong financial results. And I'll now turn the call over to John to discuss our operational results.