Operator: Our next question today comes from Tobey Sommer with Truist Securities. Please go ahead.
Jasper Bibb: Hey, good morning. This is Jasper Bibb on for Tobey. Solid waste margins of quarter, obviously quite strong even with the unexpected costs. Also seems like cost inflation, particularly on the labor side is moderating a bit. But was hoping to get your preliminary expectations for how we should think about those main unit cost buckets tracking into 2024.
Mary Anne Whitney: Sure. So certainly start and welcome [indiscernible] input. We look at a couple of key areas, one being wages. And so wages in 2023 coming into the year, we expected to be in the range of 6% to 8%, the increases, same employee increases starting at 8% and moderating maybe to that 6% or 6.5% over the course of the year. And the update is that’s happening. And so we’re seeing those improvements in wages particularly. And then I’d say more broadly, the inflation we’re seeing and that we’ve referred to in that price cost spread has stepped down over the course of the year from low double digits from over 10% to now more like 5.5%. So I’d say the trajectory, first of all, it’s playing out as we expected because the expectation was that for instance on the wage front, the outsized increases we put in during the course of 2022, we knew would anniversary over time and not need to be put in at the same level in 2023.
So as we continue, that trajectory should continue to moderate. But I think what we’ve proven is that being in that 5% to 5.5% range that should be – we expected that’s what we would see and it’s playing out largely as expected.
Ron Mittelstaedt: And I would say, Jasper, that for 2024 we’re seeing CPI somewhere in that 3% to 4% range. Is what’s being talked about or actually what’s coming in now. Actually in the low 3% range, I would expect wage increases to be in that 3.5% to 4.5% range. So stepping down somewhat obviously from the high level of CPI in 2023. But that would be sort of what I would expect from 2024 as we sit today.
Jasper Bibb: Thanks, that makes sense. And then some of your peers have discussed project delays on their landfill gas build out. Just hoping you could give some color on your experience getting these early projects off the ground and are you seeing any of the timelines move to the right at all there, because of permitting or utility issues?
Ron Mittelstaedt: Yes, well, our peers are not alone. The reality is that the utility infrastructure for the most part in the country is not quite as ready as perhaps the producers like us are ready. There is significant delays in them getting transmission lines and interconnects ready, and that is pushing projects out sometimes six to 12 months from expectation. And we are also seeing some supply chain for transformers, generators, and other components that are needed be delayed as well. So, still very good visibility on the projects, feel very comfortable with our 200 million by 2026. But can some projects move three to nine months? Yeah, they can, and yes, they are. And we are seeing that as well.
Mary Anne Whitney: And that’s one of the reasons as we think about our preliminary thoughts for 2024, the projects coming online, the three that we anticipate by early next year will be additive to anything we’ve talked about for 2024.
Jasper Bibb: Right. That’s super helpful. Thanks for taking the questions.
Ron Mittelstaedt: Of course. Thank you.
Operator: And our next question today comes from Michael Hoffman with Stifel. Please go ahead.
Michael Hoffman: Hi. Good morning, Ron, Mary Anne, just to touch on 2024, Am I in the right neighborhood if I go price, six to eight volumes, negative two fuel surcharge zero M&A is two, and that gets you to that sort of six to eight. Is that mid to upper organic top line? Is that the right way to think about it?
Mary Anne Whitney: Clearly, what we’ve said implies price plus volume, probably mid single digits, right to get to the mid to high. Now is it six minus two? Is it five and zero? Is it five and a half? There’s moving pieces in there, but we expect volumes to continue to be negative and price needing to be more than that to get to that mid single digit range.
Ron Mittelstaedt: And Michael, the way – I think – you should think out of it, again, probably price in that six to seven range, volume in that negative one range up to negative two probably starts a little higher, just as comps, and then improves throughout the year. Again, we don’t have quite as many acquisitions this year as we did coming out of 2022 into 2023, so there’ll be less shedding. So I think you get to the same math, but there’s just a little nuance on it.
Michael Hoffman: Okay, that helps a lot. And then, Mary Anne, can you tell us what your year-to-date average commodity basket and year-to-date average RIN prices, and then what is the current number, so we can kind of figure out how to roll that into next year?
Mary Anne Whitney: Sure. So for OCC, we’re trending for the full year to about $80 a ton, and that’s using Q4 being at current rates, which are closer to $100. And then RINs for the full year are trending to about $2.60 assuming Q4 is closer to $3.
Michael Hoffman: Okay. All right. That’s very helpful. And then, Ron, you’ve talked about 34%, getting the whole company back to 34%. Everything I’ve heard so far, there’s nothing that backs you off of that target and somewhere in the 2025 time zone.
Ron Mittelstaedt: That’s correct. Yes. And Michael, I have said that we will get there or believe we will get there, again, depending – I’ve also said that is with sort of 21 level commodities. Okay, so with that caveat, but that is also without RNG.
Michael Hoffman: Which is all tailwind at this point, if we’re staying in that $2 to $3 range. Are we – can you remind us what your 2021 commodity basket was?
Ron Mittelstaedt: It was probably right at about we give us 1 second, and we can we’re looking for that information. So we are going to be for the year Mary Anne just said we’ll exit the year at a blended 80, Michael, we’ll exit the year about…
Mary Anne Whitney: So OCC was 150…
Ron Mittelstaedt: 150. So the basket was just a little lower.
Michael Hoffman: So 2021 was 150. Is that what you said?
Mary Anne Whitney: That’s right.
