Jim Fish: Yeah. I think the takeaway here is we were guiding to about 1% volume and now we’re probably down to about a 0.5%. So it’s a move, but it’s not that meaningful of a move. It’s early in the year, too. I would tell you that when we were preparing for today, we’re obviously looking at Q1, Q4, and we’ve seen a little bit of an uptick here in April. It looks like it’s getting a tad better. I think the bigger news is aside from a little softness in the housing sector, which we spoke to, I think the rest of the business is still performing well. When you look at our post-collection volume, particularly MSW and our commercial volume still performing well, that’s what really gives us conviction about the $100 million for the balance a year that Devina commented on.
Sabahat Khan: Great. Thank you.
Operator: Thank you. Please stand by for our next question. Our next question comes from the line of Toni Kaplan with Morgan Stanley. Your line is open.
Hilary Lee: Hi. This is Hilary Lee on for Toni. Thanks for taking the questions and congrats on the quarter, guys. Just want to touch on pricing a little bit. So when you said earlier that you expect price to hold for the rest of the year, does that mean you’re expecting core price to be closer to around that 7% rather than the 6% you said last quarter?
Jim Fish: Well, we did say for price that, and I mentioned it earlier, that we actually exceeded a little bit of our expectations. So we’re not changing anything for the year, but your point is well taken, that we actually ended up a little bit higher than the full year guidance and so that’s a positive for us. At this point, we’ll leave it where we originally set it though.
Hilary Lee: Got it. And as a follow-up, just wanted to touch on the sustainability. I know last quarter you talked about having about $115 million of EBITDA coming from the sustainability investments for 2024. Just wondering if you would be able to kind of give us a little bit of information on potentially the cadence or kind of the split between RNG and recycling. Any details would help. Thanks.
Tara Hemmer: Sure. The $15 million increase that Devina referenced, the most significant portion of that is from recycling and really from commodity prices, and not a whole lot of benefit from the Renewable Energy business. And the reason for that is we today have about 85% of our volume locked in, in either short, mid- or long-term offtake at this point, which is an increase from what we had said during our last call, which was roughly two-thirds. So while RIN prices are increasing and we saw — we’ve seen increased RIN prices, we’ve also seen some offsetting items on really natural gas prices and power prices related to a more mild winter that we had this year.
Devina Rankin: And in terms of the cadence of when that shows up, it will be more heavily weighted towards Q3 and Q4, because our timeline with regard to the incremental projects that are coming online is weighted towards the back half of the year.
Hilary Lee: Great. Thanks for the questions and congrats again on the quarter.
Devina Rankin: Thank you.
Jim Fish: Thank you.
Operator: Please stand by for our next question. Our next question comes from the line of Michael Hoffman with Stifel. Your line is open.
Michael Hoffman: Thank you. Good morning, everyone. Devina, Jim, John, do we have a new baseline in margins? We can now say 29.5 to 30 is the new baseline and we’ll grow from there?
Devina Rankin: There’s certainly nothing in the current year that tells us that this isn’t the right baseline. So I do think that that’s a great way to look at it, Michael. Everything that you know about the WM culture is one that’s focused on the customer and focused on continuous improvement and I think those two things shown through and that commitment won’t stop. So I do think the new baseline can go upward from here.
Michael Hoffman: And then everybody, of course, is trying to figure out how they’re supposed to model 25 already. But if we — you have to have some assumptions. So like what we think inflation is, what we think GDP is. If we said 3% inflation and 2.5% GDP, your price cost spread on that number should still produce probably 30 basis points of margin and then you still have everything John and Tamara, sorry, Tara. That’s a mouthful. This is my sixth earnings call in the last seven hours. So it’s running together. All that self-help’s still left too. Is that the right way to think about without putting the number on the increments? I start with 30 price cost spread management, somewhere between 29.5 and 30, add that 30 to it, and then I get self-help?
Devina Rankin: I think that you’ve characterized it well in terms of self-help. I think it’s that continuous improvement mindset, as well as some of the things that were out of our control like truck deliveries for a while. We’ve really moved past that headwind and are starting to see strong traction from getting the assets that we need to run our business.
Jim Fish: I look at it as…
Michael Hoffman: And then…
Jim Fish: … continuous improvement, Michael. Self-help kind of…
Michael Hoffman: Yeah.
Jim Fish: …sounds like I was an alcoholic and I’m coming off the bottle.
Michael Hoffman: Oh! I didn’t mean it pejoratively. I think of it as things that you can do that you control as opposed to relying on the macro.
Jim Fish: I know. Just giving you a little bit of a hard time.
Michael Hoffman: But what are you drinking these days? So, cadence, Devina, in 4Q, you said first half, second half, EBITDA growth should be about equal. Does anything change with the performance at this juncture?
Devina Rankin: The only thing I would say is that first half solid waste growth is even greater than what we had projected, because what you saw is the strong margin performance and growth from the solid waste business really showed up more quickly than we anticipated. So, that solid waste lift comes more heavily weighted towards the first half of the year.
Michael Hoffman: So, a little more weighting than slightly as opposed to evenly. Okay.
Devina Rankin: Right.
Michael Hoffman: And on the $85 million of operational leverage, how much of that is the ITC benefit that runs through gross margin instead of through the tax line?
Devina Rankin: None of it, zero.
Michael Hoffman: Okay.
Devina Rankin: All of it in the tax line.
Michael Hoffman: Perfect. And then given the improvement in retention, I would assume the safety metrics are also at all-time goods?
