Waste Management, Inc.

Good day and thank you for standing by. Welcome to the WM Third Quarter 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 a question during the session, you will need to press star 1-1 on your telephone. You will then hear an automated message advising that 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 will now hand the conference over to your speaker host, Ed Egl, Vice President of Investor Relations. Please go ahead.

Thank you, Olivia. Good morning, everyone, and thank you for joining us for our third quarter 2026 earnings conference call. With me this morning are Jim Fish, Chief Executive Officer, John Morris, President, David Reed, Executive Vice President and Chief Operating Officer, and Tara Hemmer, Executive Vice President and Chief Operating Officer. Jim will cover high-level financials, John will cover an operating overview and provide a strategic update, and David will cover the details of the financials. Following our prepared remarks, each of these members of our leadership team will be available during the Q&A portion of the call. Before we get started, please note that we file the 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 filings with the SEC, including our most recent Form 10-K and Form 10-Qs. We 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, we will discuss operating EBITDA, which is income from operations before depreciation, depletion, amortization, and accretion. Beginning this year, landfill accretion expense was moved from operating expenses to depreciation, depletion, amortization, and accretion to enhance comparability and better reflect operating performance. For comparability purposes, 2025 actuals have been updated to reflect that change. Any comparisons, unless otherwise stated, will be with the prior year period. Net Income, EPS, Income from Operations and Margin, Operating EBITDA and Margin, Operating Expenses and Margin, and SG&A Expense and Margin have been adjusted to enhance comparability by excluding certain items that management believes do not reflect our fundamental business performance or results of operations. These adjusted measures, in addition to free cash flow, are non-GAAP measures. Please refer to the Earn Express release and tables, which can be found on the company's website at www.wm.com, for reconciliation to the most comparable GAAP measures and additional information about our use of non-GAAP measures. 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 28, 2026, 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 CEO, Jim Fish.

OK, thanks, Ed, and thank you all for joining us today. As most of you know, after including 10 years as CEO, I'll be retiring in early January. At that time, John Morris will become WM's new CEO. John's promotion is the result of a thoughtful, deliberate succession planning process by our board of directors, and I have the utmost confidence that John is the right person to lead WM into its next chapter and build on the momentum that we've established. Looking at the results, we're right on track to achieve our guidance for the full year with revenue and free cash flow expected to finish at the high end of our ranges. During my tenure as CEO, we've achieved or beaten our original operating EBITDA guidance every year except for 2020 during COVID, and we're on track to do that again this year. Taking a look at the third quarter, The company grew operating EBITDA by 5.8%, grew revenue by 6.3%, continued to reduce our SG&A down to 9.3%, maintained operating EBITDA margins at 31% in the face of strong headwinds from fuel, and grew free cash flow by 20%. And lastly, I'm pleased that our healthcare solutions business is in such a good place after two years of hard work on the integration. For the first time since the acquisition, revenue is up year over year, and we grew operating EBITDA 33%. I believe this is going to prove to be one of the best acquisitions in the history of the company. So I want to finish my brief remarks today with a thank you and a farewell. It's been a tremendous privilege to be in this role for 10 years at this great company and to work with such a fantastic team of 60,000 people. You are all truly amazing. I want to say to our many investors and to each of you on the sales side who cover our stock, how much I've appreciated all of the support you've given me over the years. Your questions have been fair, your coverage has been comprehensive and intelligent, and your faith in us has been unwavering. And I wanted to tell a quick story here. When I was just coming into my CFO role, and my first investor meeting. Ed and I were out in San Francisco and we met with Charles Elwine at Capital World. And in my naive way, I told him that we had a plan to get SG&A down to 11%. I think at the time it was at 12.7%. And so Charles, in a nice way, but in a firm way, said, Jim, I know you're new in the job and Just so you know, though, we've heard that from you guys for a long time. And to be honest, I don't believe you. I'll believe it when I see it. And so a couple years later, when we actually did get SG&A down to 11%, I'll never forget, Charles called me and he said, you know, Jim, I didn't believe you at the time, but you did prove me wrong, so thank you for that and great job. And I don't know whether Charles is on the call today, but I have to say that's No other call from an investor meant more to me than that call that day from Charles. And now that we're at 9.3%, and I expect that to drop below 9% at some point down the road, I do think back on that, so I wanted to tell that story. And then lastly, I want to tell you that I am leaving WM with tremendous confidence, not only in John, but in Tara, in David, and the rest of the senior leadership team and the entire leadership of WM. The company is in such a great place strategically, financially, customer-wise and when I'm no longer on the inside, I will have the greatest trust in this management team. I love the culture that we've built here at this company and I strongly believe in the long-term strategy of the company. I am truly a shareholder for the long term. It's been a joy for me to work alongside so many amazing people over this 25 years. I look forward to supporting John and the team through the transition and watching WM continue to create value for all of its stakeholders. With that, I'm going to turn the call over to John. He can share his perspective on the quarter, on our outlook, and on the opportunities ahead for WM.