Devina Rankin: Tyler, I’ll just add a little bit of color in terms of specific amounts when we look at core price covering cost inflation for the portfolio overall. We talked about in Q3 that getting to a positive 100 basis points, which is fantastic for us to see. As you can appreciate, pricing activities don’t link directly to when we see cost inflation. And so when we look at Q1 and Q2, the variance between those two measures was a negative 500 basis points. In Q2, we had improved to negative 250 basis points. So what you see is the continued progress in terms of making sure that on an annual basis, we are seeing those pricing activities cover our cost inflation and when you couple that with the cost optimization efforts that we’re putting forth to more efficiently run the business and getting some help from truck deliveries we’re really starting to see the math associated with price covering inflation and hopefully getting to a point at some point where we start to see that as a lever for incremental margin expansion as well really take hold in the third quarter.
Tyler Brown: Yes, perfect. I totally get the timing. So I kind of want to shift gears just a little bit. This is for Jim and Tara. I get it that you guys are not giving guidance, and I totally appreciate that. But I do get a lot of questions about the EBITDA contribution from RNG and recycling specifically in 2024. Because if you go back to the Investor Day, I think you’re supposed to get something like $225 million combined incrementally from those two. But on the other hand, you guys are pushing CapEx. It sounds like there’s some delays I get it may be that, that build was directional, but can you just give any broad stress on what that EBITDA contribution would be next year? I think it would be extremely helpful.
Jim Fish: Yes. We can both kind of address this, Tyler, right. I think, first of all, it’s important to understand, and Tara mentioned it in her first question there that we really would prefer that you anchor on that $740 million. That’s the number that truly is to be modeled against. The other numbers, look, there’s – because of the movement and we anticipated some movement in capital spending, we anticipate some movement in permitting. We’ve had a good story on permitting in Canada. I mean so – but we’ve also had delays on supply chain and hence, the movement around in CapEx from one quarter to another. And so the numbers that we gave were really more of a buildup to that $740 million, not intended to be guidance. So that’s, I think, first point.
The second point here is that with 40 active projects ongoing, there’s – and a lot of movement by the way, both in recycling commodity prices and D3 RIN pricing, natural gas pricing, those businesses are really – it’s why we wait to give guidance until February. I know companies give a lot of guidance this time of year. But our preference is to wait and give ourselves a bit more time, particularly in today’s in today’s climate, where visibility isn’t fantastic. You can’t look off the bow at a ship and see for 20 miles. Now it’s not 10 feet either, but it’s not 20 miles. So we’re really giving ourselves the benefit of a little bit of extra time before we try and answer that question directly. And I’m not trying to punch your question, but it is just going to be much easier for us, for Tara or Shahid for that whole team for Brent Bell to give a very precise answer in early February than it is today.
Tara Hemmer: And we’ll be much further along in our construction process for those 2024 projects.
Tyler Brown: Okay. Yes. No, I completely get it. And maybe just my last one kind of in the same day, and I’ll try again in a little bit different way, but it looks like you deferred about $230 million, I think, from your original guidance on green CapEx. So should we think about $750 million kind of maybe being a number to use for next year as well just on the CapEx side? Thanks.
Devina Rankin: Tyler, I’ll take that really quickly. But deferral in 2023 was $350 million in the aggregate from where we started the year. Some of that will roll into 2024, as Tara mentioned, because it really is just kind of a not writing the check in December, but instead writing it in January or February. But then we do expect that some of what we had anticipated as 2024 capital could move into 2025. And so it’s difficult to say that we’ll just take that $350 million and added on to what we had previously projected for 2024 because we will have some shift from 2024 into 2025. But all in all, those projects, the confidence in them that Tara spoke to, I think, is the most important point. For us, it’s making sure that we do the right thing from a working capital management perspective, and pay for this capital when it’s placed into service or aligning those two as best we can.
Tyler Brown: All right. I appreciate it. Thank you.
Devina Rankin: Thank you.
Operator: One moment for our next question. And our next question comes from the line of Tobey Sommer from Truist Securities. Your line is open.
Jasper Bibb: Hi, good morning. This is Jasper Bibb on for Tobey. I wanted to ask about the SG&A optimization effort. I think if I heard you correctly in the prepared remarks, there was a comment about current SG&A levels being sustainable. So as we look out to 2024, should we think about SG&A at 9% of revenue being a good starting point for the year? Or any context there would be helpful.
Devina Rankin: Yes, that’s exactly right. When we look at the levers that have been used to deliver SG&A in the current year, it really is our focus on technology and optimization, particularly with some of the success that we’ve seen in customer experience and sales. And that customer engagement model is something that we know will continue to create momentum in the years ahead. And the cost discipline as well has been really important. So 9% as a percentage of revenue, we feel like is a new long-term sustainable level of SG&A going forward.
Jim Fish: It’s probably worth mentioning here, too, that – I mentioned it in my prepared remarks, the 5,000 to 7,000 positions that would come out through attrition that has to-date and so far, the number I gave was 1,650 positions since January of 2022. To-date, that has mostly been SG&A type positions. The big buckets going forward to get us to that 5% to 7% are mostly OpEx position. So when I think about what’s happened today, most of those positions came out of our customer experience department where we’ve used technology to really automate a lot of that. Our call volume has been down as much as 25%. So those positions that had high turnover, 50%-ish type turnover we just chose to not replace. Going forward, the big buckets where you’ll get up to that 5,000 to 7,000 range, the big buckets become recycling automation.
Now that is ongoing. I talked about a 35-ish percent reduction in labor cost per tonne. But as Tara mentioned, there’s a lot of projects ongoing. We’re not even close to even one-third of the way through those. So there’s a lot of positions yet to come out in our recycling business. Those largely fall into the OpEx category. Then John mentioned the conversion from rear load to ASL. Some of those have taken place this year, but probably three times as many next year. And then the last bucket, which is probably the most difficult one, and we have talked about it quite a bit, but is route optimization. That involves a lot of technology. It involves a lot of process change, but there’s also a lot of payback in that when we get it right. So those buckets are mostly OpEx buckets.
The previous buckets in that 1,650 positions were mostly SG&A.
Jasper Bibb: That makes a lot of sense. And then I was hoping to follow-up on the sustainability capital spending. I guess, what are the most frequent issues you’re seeing that are delaying these projects, whether it’s supply chain or permitting? And the projects that were already delayed earlier this year, any color on what’s been the experience or the time line on resolving those earlier delays?
